Sunday, June 21, 2015

1 in 5 Vehicles Built in North America were Built in Mexico as even More Jobs Move South

Factory workers attend a Volkswagen AG 50th anniversary 
event at the company’s plant in Puebla, Mexico, on 
Jan. 14, 2014.(Photo: Susana Gonzalez/Bloomberg)
The auto industry is looking south for new factories, and the farther south, the better.
Canada is struggling when it comes to retaining auto jobs, the U.S. is a house divided with most of the new automotive investment and jobs headed south of the Mason-Dixon line and Mexico is the auto industry darling.
The three countries are a united trading block under the North American Free Trade Agreement, or NAFTA, but they're fierce rivals in the boardrooms where auto executives decide where to invest in the latest equipment and additional jobs.
Of the vehicles built in North America last year, Mexico produced about one in five, or double the rate from 2004. WardsAuto, which tracks production data, expects the rate to increase to one in four by 2020.
"The U.S.' South and Mexico are winning the battle," said Dennis DesRosiers, president of DesRosiers Automotive Consultants near Toronto. "Over half the capacity and 80% to 90% of investment dollars are going to the U.S. South or Mexico."
Conversely, he sees the Canadian auto industry dwindling to five automakers with a single assembly plant each over the next decade or two — or about half its current manufacturing footprint.
The United Auto Workers union is keeping a close eye on the flood of automotive investment migrating to Mexico. The issue is especially critical for the UAW this year as it seeks product commitments from the Detroit Big 3 automakers in negotiating a new contract for about 140,000 U.S. autoworkers.
The auto industry is global, but increasingly companies want to build in the region where they sell. Which means chances are your new vehicle will continue to be built in North America but may not be made in the U.S.A.
Read the rest of the story HERE.

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