https://www.reuters.com/business/retail-consumer/toymaker-ma…
Expanding production in Mexico in response to unreliability (and higher costs) from plants in Asia. Shut downs due to Covid and shipping delays. Costly air freight needed to meet holiday demand.
Many others probably have similar plans. This is one of the first to make the news.
A few years ago, I read of Mexican factories recruiting people from the immigrant stream passing through Mexico from points south toward the US. I would be delighted to see more people finding a life in Mexico, building the things that we now get from China. I see that as a win for everyone except the Xi repressive dictatorship.
When Ford announced they would source the Focus from China, rather than Mexico, before Ford dropped the Focus entirely, they said the variable cost of building in Mexico was less than in China, but the cost of an extra set of tooling for Mexico make it more cost effective to leverage the tooling they already had in China to supply that market.
Steve
Yes, and you can bet that shipping costs and labor costs went into the calculation. Plus you might suspect that Ford hoped to sell many Focus models in China, a huge market. Shipping those low labor cost vehicles made in China to the North American market looked like a winner.
Did it work out for them?
Shipping those low labor cost vehicles made in China to the North American market looked like a winner.
Ford said the cost of a set of tooling to build the Focus in Mex was about half a billion. That CAPEX is what shifted their decision making to going with the higher variable cost cars from China.
Did it work out for them?
Ford ended up not offering the gen 3 Focus in North America at all. They chose to push Focus prospects into the higher ATP Escape CUV instead.
Steve