Ford Finally Confirms It's Moving All Small Car Production To Mexico

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Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.

1st Gear: Of Course They Are

Ford finally, officially confirmed what everyone already knew and what it’s been alluding to for a year now: that its small car production is set to shift to Mexico after 2018. As The Detroit News points out, it’s a cost vs. profit issue. They don’t make money on the small cars like they do on trucks and SUVs.

After 2018, the only American-built small cars from a domestic automaker will come from GM, which builds the Chevrolet Cruze, Sonic, Volt, Bolt EV and Cadillac ATS in America. Small cars from foreign automakers including the Hyundai Elantra, Toyota Corolla and Honda Civic are built here, too.

The exodus of small cars south of the border is a result of automakers managing costs for low-profit vehicles that consumers have turned their backs on in an era of $2-per-gallon gas. And if demand ever shifts back to small cars, analysts say U.S. workers who mostly build trucks and SUVs are safe because large vehicles today are more fuel-efficient than in years past.


That means production of the Focus and C-Max will move away from the Michigan Assembly plant, but Ford has insisted that this won’t result in job losses because they plan to build more trucks and SUVs in the U.S.

Still, the Mexico move has been a political flashpoint in this very contentious election, with GOP presidential candidate Donald Trump continuing to flog Ford over it:

The Mexico issue is in the spotlight in part because presidential candidate Donald Trump has vowed to impose a 35 percent tariff on any Ford cars built there. Trump on Wednesday decried Ford’s announcement.

“We shouldn’t allow it to happen,” he said at his appearance in Flint. “They’ll make their cars, they’ll employ thousands and thousands of people not from this country and they’ll sell the cars right through our border. No tax, no nothing and we’ll have nothing but more unemployment in Flint and in Michigan. It’s horrible.”

2nd Gear: Ford Fucked Up

Like I said, we’ve known about this for a while. But Ford has been evasive about what was really going on, and that’s dragged what should have been a brief news story through a year’s worth of criticism by Trump and ugly (and often inaccurate) coverage full of concerns about the U.S. losing manufacturing jobs.


Over at Automotive News, Nick Bunkley has a good piece on this messaging fiasco:

It’s managed to turn the fact that it’s moving small-car production from the U.S. to Mexico into a yearlong debacle, right in the midst of the most divisive presidential election in history. Republican nominee Donald Trump has been more than willing to take the bait, repeatedly bashing Ford as traitorous during rallies and debates.

Instead of just being transparent and explaining that the shift will allow hourly workers in Michigan to have better job security by building more popular, profitable pickups and SUVs instead, Ford decided to leak its plan in drips and drabs starting in the summer of 2015. Until Wednesday, Ford executives were inexplicably evasive about the subject every time it came up.

[...] Everything about this “breaking news,” as some websites labeled it, is old. Yet it’s the most prominent headline emerging from Wednesday’s investor meeting, overshadowing four hours of presentations aimed at laying out Ford’s path to future success as the industry rapidly evolves.


It’s true, this could have been handled a lot better.

3rd Gear: More Tacos

Speaking of Mexico, Toyota’s Tijuana plant, where the Tacoma is built, is an isolated and small but highly effective facility that feeds America’s insatiable demand for the midsize truck. The Tacoma dominates that market, but it’s up against more and more new competitors like the Honda Ridgeline, Chevy Colorado and the upcoming reborn Ford Ranger.


So Toyota is putting more money into the plant to assure the truck’s dominance, reports Automotive News:

Toyota will invest $150 million at its Tijuana, Mexico, assembly plant to increase output of the popular Tacoma pickup amid tight inventory that the company says has held back sales.

The expansion will bump capacity to about 160,000 units annually in late 2017 or early 2018, from just over 100,000 currently, the company said in a statement Wednesday.

[...] Tacoma sales are up 4 percent this year through August, but its share of the midsize market has shrunk to 43 percent, from 51 percent a year earlier, amid the new competition. Toyota’s investment in capacity represents a bet that it can reclaim some of that share, and capture more of the segment’s growth, by increasing supply, even as the overall light-vehicle market begins to soften.

The Baja plant is currently stretched to its limit, having added a third shift in April 2015, executives at the plant said during a recent tour. The plant runs 24 hours a day Monday through Friday, plus two shifts on Saturday, then closes for maintenance.


America just can’t get enough Tacos!

4th Gear: ‘Pushing The Envelope Of Safety’

Usually when two companies part ways, they don’t take to the media to blast each other. That’s not the case with the rift between Israeli tech firm Mobileye, one of the leaders in vision-based autonomous driving systems, and Tesla. Until this summer the two had been working together, but that changed after the first semi-autonomous driving death in a Model S.


Now, Mobileye’s chairman and CTO has said what he really thinks of Autopilot: that it’s “pushing the envelope” in terms of safety. Via Reuters:

“It is not designed to cover all possible crash situations in a safe manner,” Amnon Shashua, who is also chief technology officer at the Israel-based maker of collision detection and driver assistance systems, told Reuters.

“No matter how you spin it, [Autopilot] is not designed for that. It is a driver assistance system and not a driverless system,” he said in an interview.

The safety of Autopilot, which helps drivers stay in lanes and steer on highways, was thrust into the public spotlight after a fatal crash involving a Tesla Model S driver using the new technology in May. Tesla said in a blogpost after the accident that “neither Autopilot nor the driver noticed the white side of the tractor trailer against a brightly lit sky, so the brake was not applied.”


Tesla over the weekend announced updates to Autopilot that make heavier use of radar for safety, updates that Elon Musk said may have prevented that fatal crash. But it hardly blunted Shashua’s criticism:

Shashua said the company had reservations about the mixed messages from Tesla about Autopilot — both boasting of its capabilities while cautioning that drivers needed to keep their hands on the wheel — especially after watching Tesla’s response to the Florida crash.

“Long term this is going to hurt the interests of the company and hurt the interests of an entire industry, if a company of our reputation will continue to be associated with this type of pushing the envelope in terms of safety,” he said.


5th Gear: Google Wants Tweaks To Michigan’s Autonomous Car Bill

Michigan looks poised to push through a package of legislation that will allow for the testing and deployment of autonomous vehicles, but Google wants some changes made. Via The Detroit Free Press:

In a letter to Rep. Bradford Jacobsen, R-Oxford, and members of the House Communications and Technology Committee, Google executive John Krafcik, head of Google’s Self-Driving Car Project, took issue with two provisions and asked that they be amended.

The first defines a “motor vehicle manufacturer” as a company that has distributed motor vehicles before participating in research within Michigan.

“One interpretation of that definition would exclude companies, like Google, that manufactures autonomous vehicles but do not currently sell them,” Krafcik wrote. The second provision requires autonomous vehicles operating in Michigan to be “supplied or controlled by a motor vehicle manufacturer.”

“That could be interpreted to exclude vehicles supplied by a vehicle manufacturer that another company, like Google, modifies with automated driving systems,” Krafcik said. “We urge you to consider these small but crucial amendments to the bills to ensure that investment and deployment of autonomous vehicle technology is not inadvertently discouraged in the state.”


Google wants in on this stuff too. Whatever they’re doing with it.


Reverse: You Were Only Supposed To Blow The Bloody Doors Off…

Neutral: Is Ford’s Shift A Disaster For American Manufacturing?

Or just a smart business move to focus domestic production on more profitable vehicles?