Why is Ford’s most advanced auto manufacturing located in Brazil rather than Detroit?

Ford’s most advanced manufacturing plant is located in Brazil. Why didn’t they make this capital investment in the USA? Larry get real here. It’s called “outsourcing” to maximize shareholders profits in a global competitive market. These manufacturing jobs will not return to this country regardless of what the politicians may claim.

As I think about the concept of “outsourcing,” I need to point out that this concept predates the current US industry dilemma.
Sadly after World War II we were the only manufacturing game in town. The U.K. was destroyed as were the factories in the industrial countries of Germany, Japan and Italy to name but a few.

We helped rebuild their manufacturing plants while we neglected our own. One industry colleague of mine was Philip Crosby who coined the expression “Zero Defects.” Two of his peers, Ed Demming and Joe Juran, found the Japanese manufacturers receptive to their quality control improvement processes while the “big three” in Detroit felt no need to focus on improving quality. Note: I guess in this example we outsourced brainpower. With the early oil embargo’s the Datsun, Honda, Mazda, Mitsubishi and Toyota plants cranked out smaller, reliable and more affordable cars while we were building muscle cars with over 300 HP. I know, I once owned one. We did not care about mileage when paying 25 cents per gallon for 100 octane fuel. So in effect, consumers created outsourcing in the postwar years by demanding better quality and lower cost vehicles. Look what has become of our domestic auto industry while Toyota is now the number one auto manufacturer in the world today.

When the US finally woke up to competition we were faced with increased labor costs thanks to strong collective bargaining agreements with unions that drive up the cost of every vehicle. One solution is to go off-shore which is what has happened not just in the automotive industry. We passed huge auto manufacturing plants in China last year where VW, GM and Daimler-Chrysler have invested billions into joint venture plants that are working around the clock turning out record number of cars for both domestic use and export. We were told that by 2010 China will surpass Japan in number of cars produced.

However, to show what can be accomplished when you invest in robotic manufacturing the recovery of said costs should happen rather quickly, watch the video as linked below. While I see “investment tax credits” available for solar energy do other domestic industries enjoy similar opportunities? If not, why not? This short video is worth a few minutes of your time.


About Larry Gilbert