it Was a jug of cold water to the mexican Government and a foretaste of what could be an extremely difficult year for Mexico. Even before his official entrance to the office the next January 20, the threats of the newly elected president of the united States, Donald Trump, already seem to take effect. The american car manufacturer Ford announced this week that it will abstain from the investment of $ 1,600 million is planned in Mexico. To change allocated 700 million dollars to the production of electric cars in Flat Rock, Michigan.
how the Advancement of trust?
Ford had announced the investment in an electoral campaign. So it seemed a challenge to the protectionist measures of Trump, who, during the campaign, strongly attacked the consortium qualifies as a “shame” that I could remove the production and employment abroad. Ford had planned to build a plant of 1,600 million dollars in San Luis Potosí (north of Mexico), which would lead to 2,800 new jobs and would manufacture models Fiesta, C-Max and Focus. In total, Ford operates in Mexico in two manufacturing plants and an engine plant.
Ford Plant in Cuautitlan (Mexico)
The director of Ford, Mark Fields, said at a press conference extraordinary that the withdrawal of San Luis Potosi was mainly due to the “dramatic decline in the demand for small cars in North America.” There was no deal with the newly elected president. However, Fields was confident that Trump will offer more favourable conditions in the united States and argued the decision as a “breakthrough confidence” in the new president to the television channel CNN.
A key sector of the economy
on the other hand, the Government of Peña Nieto regretted that in Mexico the withdrawal of Ford. According to a press release of the Ministry of Economy, the consortium will have to pay back the incentives received: “The jobs created in Mexico helped to keep employees in the U.S., that would otherwise have disappeared due to competition from Asia.” In addition, it is also a blow to a strategic sector of the mexican economy, in which the automotive industry takes up to 900,000 direct employees and accounts for 3.1 per cent of Gross Domestic Product (GDP).
A large part of the automobile production of the united States is outsourced to subcontractors in Mexico, and one-third of the imports of automobiles from the united States come from the Latin american country. For German manufacturers such as Volkswagen , BMW, Audi and Daimler, the country has become an important production base and, according to the consultancy firm Roland Berger, the international companies could invest around $ 17 million until 2020.
In part, this condition is due to the Free Trade agreement of north America (NAFTA ) of 1994, according to which many car companies and other manufacturers settled south of the Rio Grande to produce with views in the u.s. market. The economies of both countries are closely intertwined and the US is the main trading partner of Mexico, a country in which three quarters of the production are intended for your partner from the North. Now, with his threats to impose tariffs on the import, Trump would attack from the root to the free trade agreement.
capital Flight and migration
The withdrawal of Ford could also be the prelude to a massive withdrawal of foreign capital, which would take a lot of pressure to the ailing mexican economy. “The danger is that other companies do the same,” said Gabriela Siller, an expert financial Bank BASIS, to The el País newspaper: “we do Not believe that is limited to a single case.”
In fact, the manufacturer of air conditioning Carrier resigned to relocate part of the production from Indiana to Mexico before that Ford. And the end or modification of the NAFTA could also affect international brands of cars, because they are interested in Mexico face the us market. The country has cheap labor and qualified, in addition to a great experience as a provider. But if Trump meets their threats, many mexicans may lose their job. And an economic crisis of these features, it could become a migration crisis, and turn against one’s own Trump.
No comments:
Post a Comment