Following Trump’s speech, Ford announced in late March of 2017 that they are going to invest $1.2 billion in the US auto industry. A deal was inked by Ford in the year 2015 with its workers in three of their Michigan plants, and this is Ford honoring that deal.
Boosting the US Economy
https://commons.wikimedia.org/wiki/File:TAG_Climate_Protest_UAW.jpg
Except $200 million, all of the remaining investment is part of a labor contract that the company inked with United Auto Workers which is a union that also represents Ford employees.
Now this union is ecstatic and so is America over this deal but Ford does not have contracts with the unions that drain the company dry and cause it go bankrupt. This is what devastated GM in the early part of this century. This is why Ford did not have go into bankruptcy or ask for a bailout like GM did. Subsequently, Ford does not owe America around $16 billion like GM does.
Moreover, the union has originally secured a commitment of $9 billion from Ford by the year 2019 in US plants. Of the $9 billion commitment that Ford was supposed to honor, it has already fulfilled half of that through different UAW contracts over the years, and they are planning to implement the remaining half in the coming years.
The Trump administration on the other hand is happy with Ford keeping its promises because this news means that more jobs will be created in the US, something Trump has been working towards ever since he came into power. He was seen tweeting in the morning the following:
"Big announcement by Ford today. Major investment to be made in three Michigan plants. Car companies coming back to U.S. JOBS! JOBS! JOBS!,"
But really this is nothing according to so many. The jobs and money will not be coming back to America until that corporate tax rate is lowered. America’s corporate tax rate is at 35% which makes this country non-competitive; America has the highest corporate tax rate in the world. The Trump team wants to get this rate down to 15% and they want to do this very soon, by the summer of 2017, if not sooner. When this happens, it will be Christmas every day for months for America, the American worker (of all stripes and industries), and certainly Ford.
How many F-150s will they sell then? Records will be broken!
All the Right Moves
https://pixabay.com/p-303221/?no_redirect
It is to be noted here that the newly elected President had visited Michigan earlier this month in order to meet with some auto executives. After the meeting was concluded, it was revealed that Trump had promised to roll back some of the harsh automobile regulations that were in effect. There were also hints of a major announcement that was coming soon from Trump.
It is indeed golden news for the US economy that Ford and UAW have decided to honor their agreements made two years ago.
Jimmy Settles, vice-president of the Ford-UAW, was happy with the deal and said that the men and women who have been working behind the scenes on these two locations will be able to reap the full benefits of their hard work and the patience they have bestowed has paid off.
Out of the total of $1.2 billion investment, 850 million will be invested in the Michigan Assembly Plant which will be responsible for manufacturing the newly resurrected Bronco in the year 2020 and new Ranger pickup trucks in the year 2018.
The Breakdown
https://pixabay.com/en/car-exhaust-exhaust-automobile-1902909/
The $150 million of the vetted amount will be invested in expanding an existing engine manufacturing plant creating 130 jobs in the process. Another $200 million will be invested in developing a new data center that will handle new vehicles that rely more on technology and the Internet. The news came in an official statement that was released by a Ford representative.
The investments made in the data center will not be counted towards the $9 billion pledge that Ford made to UAW workers because it will not create any new jobs. So, this brings Ford's total investments to $4.7 billion. Pretty impressive.
700 new jobs will be created in Flat Rock Assembly plant where Ford will be investing $700 million. This particular announcement was made in January in this year.
Making the Industry very Happy
Trump, on the other hand, has announced that he will be freezing the auto emission targets in the future because they were irrational, restrictive, and stifled innovation. This is to further help and support the automobile manufacturing industry. The rules were set by the former US President, Barack Obama who did nothing about the millions of jobs and billions of dollars that moved offshore and who may be in trouble for spying on Trump and his team but that is another topic.
Ford is making the right moves again. Ford is on the track in all their departments. It is a shame more Ford vehicles are not driven in countries like Germany which is another aspect Trump and his team want to address.