Ford to More Than Double Mexico Production Capacity in 2018

Ford Motor Co. announced that they would expand manufacturing capacity in Mexico over the next three years by more than double. This decision is going to cost about 1.5 billion dollars, but with the new plant, they can produce additional 500,000 new units per year in Mexico in 2018. Base on this journal, Ford is not the only automakers have build factory in Mexico in the recent year. Other companies like BMW AG, Volkswagen AG and Toyota Motor Corp. Honda Motor Co. had also build assembly lines in Mexico.

Some people think this decision is result of the recent labor agreement that pushed wages higher. But, the president of UAW claimed that there was no financial reason for U.S. automakers to switch their production to Mexico, because “they’re making profits right here in the United States.” If he is right, I think the increase in labor costs is only a part of the story. The other significant reason might be the fact that Mexico has less legal regulation, taxes, and trade restrictions, which makes it much easier to do business there.




http://www.wsj.com/articles/ford-to-more-than-double-mexico-production-capacity-in-2018-1454857923?mod=e2tw