The hope of the American auto industry is being outsourced.
Published on October 31, 2011
The Ford Fusion is the face of Detroit's future and one of the great hopes of American auto manufacturing. The Motor Trend 2010 car of the year, it has been dubbed the "Comeback Kid" and the "Do-It-All Sedan". Amidst the smoking ruin that is the American automobile industry, this is desperately hoped for good news, proof that Detroit is capable of resurgence, that we can beat the Japanese at their own game and that the state of Michigan may not dry up and blow away after all.
There's only one problem.
The Ford Fusion is not made in the United States. It is made in Mexico.
It may have a Ford logo on the front. It may be made by a corporation that has its headquarters, at least for now, inside the confines of the continental United States, but Ford Fusions roll off an assembly line at the Hermosillo Plant in the state of Sonora in Mexico. There are thousands of people working in that plant, but, outside of a relative handful of managers, none of them are American citizens.
In Michigan, former home of the American automobile industry, people are hailing a decline in the unemployment rate statewide from 15.3 percent in September 2009 to "only" 14.6 percent in December 2009. What they are not pointing out is that even that modest decline in a catastrophic level of unemployment is not a product of increased numbers of people working but of ever greater numbers of individuals giving up hope of finding a job and simply dropping out of the work force. In 2009 alone, Michigan lost 351,000 jobs.
In 1994, the year that the North American Free Trade (NAFTA) agreement was signed, Michigan had an unemployment rate of 8.3 percent.
In January 2010 the Washington Post, in conjunction with the Kaiser Family Foundation, conducted a poll in the Detroit area. Fifty-seven percent of the individuals interviewed in that poll said they considered the economy to be the number one issue in the area. When asked to describe the state of the economy 29 percent of the interviewees characterized it as "not so good". Sixty-four percent said it was "poor". One quarter of the individuals spoken to said they were giving serious consideration to leaving the area. Twenty-two percent said their main source of income was unemployment assistance. A full 44 percent of the individuals interviewed said they believed America's best days were behind her.
When NAFTA was being debated in the early 1990's, its proponents justified it in very straightforward terms. More trade would equal more wealth. Dropping trade barriers and opening up the United States without restriction to goods manufactured in Mexico would mean more economic activity and a higher standard of living for everyone. Yes, some industries, like textiles, would largely move out of the United States, due to the competitive advantage the Mexicans would enjoy in cheap labor. This would be more than offset, however, by the growth inside the United States of good, high paying jobs.
The arguments against NAFTA were just as straightforward. Ross Perot famously announced that the agreement would produce "a giant sucking sound," and that American manufacturing jobs would vanish as companies relocated their operations to Mexico. Unemployment would rise, and our standard of living would decline. NAFTA would not benefit Americans. It would victimize them.
I wish that we could have added a couple of questions to the January 2010 poll. I'd like to know who the people of Michigan think was right. And, I'd like to know if they think the Fusion is really an "American car".