Just as President Barack Obama’s deputy signed the unpopular Trans Pacific Partnership free-trade deal during an election year, Ford Motor Company has announced it will doubling production capacity at a Mexico factory, instead of enlarging U.S. factories.
The new factory will manufacture hybrid autos with gasoline and electric engines, whose development has been partly funded by U.S. taxpayers via federal research programs.
According to The Wall Street Journal, Ford is planning to build 500,000 vehicles at its new Mexican factory, starting in 2018. That is double Mexico’s 2015 production.
Ford has begun to build a new factory in San Luis Potosí, Mexico, to assemble several models including, a new model meant to rival Toyota’s Prius hybrid vehicle. In turn, U.S.-based plants will focus on light trucks and sport-utility vehicles.
Insiders say Ford will spend $1 billion to build the expansion factory in Mexico. That’s in addition to the $2.5 billion already earmarked for expansion in the neighboring nation.
Ford rival General Motors is planning a $5 billion expansion in Mexico.
But American automakers aren’t alone. New facilities are also being built in Mexico by BMW AG, Volkswagen AG, Toyota Motor Corp. and Honda Motors.
All these announcements come on the heels of new deals that offer higher wages for today’s workers, represented by the United Auto Workers union.
UAW membership began to fall from its 1979 high of 1.5 million members to only 540,000 in 2006. By 2010 it had fallen to only 390,000 members. Since 2010, membership has been slowing growing, and it grew 3 percent in 2014 . In 2015, The UAW climbed up to 403,000 members, or three-quarters of its 2006 membership.
But the plans to expand in Mexico also come at the same time Obama began pushing his Trans Pacific Partnership trade plan, one of the largest multinational trade agreements in history.
The trade deal, often derided as Obamatrade, has met with fierce criticism from conservatives in Congress many of whom fear the deal means a massive loss of jobs in the U.S. Senator Jeff Sessions (R-AL), for one, has been a fierce critic of the deal saying it does not protect the interests of the American people and our workers. Ohio Sen. Rob Portman is facing a tough election, and he’s come out in conditional opposition to the completed deal.
Even as Obama’s representatives signed onto the deal last week, Senator Jeff Sessions said voters should press their candidates on where they stand on TPP.
The Senator urged voters to insist their candidates for president and Congress “explain why we are not seeing politicians expressing support for this gargantuan agreement.”
“Every elected official, every candidate must be crystal clear about where they stand on the TPP. The American people deserve no less,” Sessions declared.
To date every GOP presidential candidate has made a firm announcement on where they stand on TPP except Florida Senator Marco Rubio. While Rubio voted “yes” to fast track the deal, he hasn’t explicitly said how he will vote on the final deal.
Rubio did say that TPP is one of the pillars in his “three-pillar foreign policy strategy,” so even as he hasn’t said if he will vote in favor of the plan. But his actions seem to point to his support for the measure.
GOP frontrunner Donald Trump, though, has been unequivocal on TPP. He is against it. Last week Trump called the plan “a terrible deal” for the United States because it is a jobs killer.
“It’s going to allow countries to continue to take advantage of us and take our jobs, take our trade,” Trump said. “It’s bad for us. It’ll allow China to come in through the back door at a later date and continue to really do a number on us, and it doesn’t take into account money manipulation — manipulation or devaluation of currency, which is the single biggest tool that countries use against us,” he said. “It’s a terrible deal.”
Follow Warner Todd Huston on Twitter @warnerthuston or email the author at email@example.com