The motor company made public their plans to halt the construction of a $1.6 billion manufacturing facility in Mexico right as President-Elect Donald Trump publicly railed against U.S. companies that manufacture their products in Mexico, specifically General Motors.
The decision, according to Ford, was made on the grounds of their confidence in Trump’s pro-growth platform. Ford now plans to invest $700 million in the state of Michigan in hopes of creating 700 new jobs.
However, General Motors was not happy with the situation. Trump’s criticism against General Motors wasn’t simply a compilation of mere talking points. The president-elect went as far to suggest a tax against companies that outsource jobs. The “big border tax” would effectively result in greater regulation on American businesses by forcing the production of goods within United States borders.
General Motors reacted to Trump’s protectionism by defending their Mexican production operations. The production of GM’s Chevy Cruz – one of the automobile manufacturer’s best sellers – was the crux of Trump’s Twitter attack of the company.
General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!
— Donald J. Trump (@realDonaldTrump) January 3, 2017
GM clarified their production operations in Mexico is largely feeding their international motors sales, whereas U.S. automobile markets receive a relatively small percentage of the facility’s output.
The debate surrounding outsourced jobs intensifies as Inauguration Day arrives and the reality of potential policy changes sets in. The automobile debate comes only weeks after the Carrier deal, adding to the litany of business deals highlighted by the President-Elect.
Carrier, an air conditioner manufacturer, struck a deal with President-Elect Trump and the state of Indiana to keep roughly 1,100 manufacturing jobs in the state.
The potential temporary nature of these jobs raises concerned among free market traders, and sheds light on the economic realities of our time.The deal is supposedly keeping jobs in Indiana, and is characteristic of the Ford Motors deal unfolding this week.
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