Dodge Ram has about half of its production in Mexico and their sales volume has not been impacted.
To a certain degree. But I just want to give you a size of scope and realize it isn’t just labor that effects where a company is located, but also the tax rate, the ability to get resources in and out, also the cost of extracting materials and having them shipped, and cooperation with local government(s).
But biggest problem a CEO has to face when moving to a new country is how the hell all that equipment gets there. You aren’t talking about moving computer equipment, you are talking about hundreds of Press Wielding machines that are measured in tons and acres.
What you are talking about, moving hundreds of miles of electrical wiring, hundreds of tons of pinpoint accurate equipment, thousands of computer networking systems with their own unique operating system, and we haven’t even gotten to power regulations, and labor yet.
TL:DR
If these companies could save money by moving to Mexico, they would have already tried.
Agreed that it would be gone if it was feasible. I worked for a small manufacturer and helped with quoting. It was three times less for us to send a product to Mexico for production.
Where the US is better is automation and complexity. In Mexico or was difficult to find the technical resources able to handle automated and complex projects. Mexico was better for any manually/ sinple assembly job, as they could just throw more people at it to ramp up production. Note that these are generalities that my specific team used.
- Mexico: Mermosillo Stamping and Assembly Plant
- Mexico: Cauatitlan Stamping and Assembly Plant
Keep in mind, that the combined total employees at these facilities is about 3000 employees, vs. the 10,000 employee plant in Kentucky.
So if we are talking about scale, I do not think it is fair comparison to say that a 6% of Ford’s operations in Mexico is worth 16% of it’s production in one factory.
Nor is it fair to assume that someone is going to snap their fingers and suddenly a new factory that can equal the production of the US is going to appear in Mexico. Or that Ford is just going to abandon a literal car factory just because labor in Mexico is cheaper.
