In order to get Fiesta, Mexican Workers had to cut their Wages

[FordBuyer]

AP

Mexico's auto unions agree to cut wages

Wednesday June 4, 6:08 pm ET

By Mark Stevenson, Associated Press Writer

Race to the bottom: Mexico lowers wages to snare international auto production

 

 

MEXICO CITY (AP) -- Mexican auto unions are taking a cue from U.S. labor leaders by offering two-tier hiring schemes and salary cuts that bring already low wages down to near-Chinese levels.

As more automakers turn to Mexico, a big argument for the North American Free Trade Agreement in 1993 -- that Mexico's low wage rates would slowly rise to close the gap with U.S. wages -- seems to have been thrown in reverse

 

 

"The pressure has not been to raise the Mexican wages up, it's been to push the U.S. wages down," said Ben Davis, the director of the AFL-CIO Solidarity office in Mexico City.

 

And now Mexican wages are being pushed down even more.

 

Wage concessions were apparently key to persuading Ford Motor Co. to direct many of the 4,500 new jobs involved in building Fiestas to the Ford plant in Cuautitlan, on the outskirts of Mexico City. Union leaders at the plant told The Associated Press they had agreed to cut wages for new hires to about half of the current wage of $4.50 per hour.

 

"We agreed to it," said Ford union leader Juan Jose Sosa Arreola. "We need to be more competitive. That's the truth. That's a reality."

 

The United Auto Workers union had hoped to preserve American jobs by offering a two-tier wage system last fall, cutting starting wages for new U.S. workers by half to about $14.20 an hour. But it hasn't worked -- the jobs are flowing to Mexico, where starting wages at some plants also have been two-tiered, to as little as $1.50 per hour with a lot less of the related pension and health care costs of U.S. workers.

 

With labor costs like these, Mexico is staying competitive with China, where an average worker at a foreign-owned factory or joint venture can make $2 to $6 per hour. While Mexican benefit costs run higher, Mexico may have already won the low-wage race.

 

Mexico also now has the advantage of a massive auto production platform based on experience with export plants and proximity to major markets that can't yet be beat in China, whose factories still produce mainly for its own domestic market.

 

Ford spokeswoman Alejandra Acevedo said she did not know what starting wages for new hires at Cuautitlan would be, but she acknowledged that to win the jobs, the plant had to compete against other Ford facilities worldwide.

 

"It makes business sense that labor costs are much lower here, and also it's much cheaper here to grow the local supplier network," said Acevedo, noting Mexico's free trade deals help slash the cost of importing parts and exporting cars, Acevedo said.

 

Other U.S. automakers also are squeezing wages. General Motors Corp. said Tuesday it will stop using relatively high-wage workers to assemble slow-selling pickups at its plant in central city of Toluca. A labor leader there said the union had gotten the message and would offer to work for less to keep the plant alive.

 

"I think we are going to have to sacrifice something in order to continue to be competitive," said Edgar Arroyo, a union leader at the Toluca GM plant, where he estimated some workers earn about $6 per hour, an extremely high rate by Mexican auto industry standards.

 

Nothing in NAFTA stops this drive to the wage floor. The treaty only requires countries to enforce their own minimum wage laws, which in Mexico means about $5 per day.

 

Foreign investment in Mexico's auto industry is soaring, averaging about $2 billion per year since the 1990s. Ford's $3 billion investment in the Fiesta project may accelerate that trend.

 

Auto exports grew by almost 68 percent between 2004 and 2007 to 1.6 million units. Most went to the U.S., but also to European and other Latin American markets.

 

But since NAFTA's approval in 1993, the gap in overall manufacturing wages between Mexico and the United States has widened slightly, according to government figures.

 

At Volkswagen's plant in the central city of Puebla, union spokesman Arturo Monter blames low wages on Mexico's antiquated system of labor laws that favor employers and discourage strikes and union organizing.

 

Unlike in the United States, where a single national union, the UAW, organizes most auto plants, in Mexico unions are deeply split and may only represent workers at one manufacturer, or even at a single plant.

 

Union leadership at Monter's plant agreed to cut starting wages to $1.50 an hour from $1.95 a few years ago. It can now take as long as seven years to work up to earning what was once the entry-level wage, Monter said.

 

Still, those lower labor costs helped win a contract for an as-yet unnamed Volkswagen model, known at the plant only as "Project Zero," that the automaker had been considering building in the United States, Monter said.

 

A VW spokesman declined to comment on production plans, saying only that nothing had yet been confirmed.

 

Mexico's abundant, youthful work force is still drawn to auto plants despite the low wages, union leaders say, because the companies offer stable employment, a rarity in Mexico's working world.

 

"Despite the fact that we're negotiating what you could call a cheaper contract, I guarantee you that if we advertise for 2,000 workers, 10,000 people are going to show up," said Sosa Arreola, whose plant sits on the outskirts of Mexico City.

[FordBuyer]

My next vehicle will be either a Taurus, Escape, or Focus. I'm not interested in buying product built by exploited workers. I know Ford has to stay in business, but I support my country and my neighbors first. Wayne, Kansas City, or Chicago gets my money.

[RichardJensen]

UAW tier 2 wage structure: $14/hour, about 2.4x the minimum wage.

 

Cuautitlan plant: $2.25/hour, or $18/day. About 3.4x the Mexican minimum wage.

 

"Despite the fact that we're negotiating what you could call a cheaper contract, I guarantee you that if we advertise for 2,000 workers, 10,000 people are going to show up," said Sosa Arreola, whose plant sits on the outskirts of Mexico City.

 

It's a sad truth that things are tough all over, and that not everyone gets to have it as good as we do here.

[Michael Reynolds]

My next vehicle will be either a Taurus, Escape, or Focus. I'm not interested in buying product built by exploited workers. I know Ford has to stay in business, but I support my country and my neighbors first. Wayne, Kansas City, or Chicago gets my money.

 

Question, and there is no offense meant by it, but when you are in the hardware store (or wherever for that matter) do you always ensure that the product you purchase (regardless of cost) is American made?

[P71_CrownVic]

My next vehicle will be either a Taurus, Escape, or Focus. I'm not interested in buying product built by exploited workers. I know Ford has to stay in business, but I support my country and my neighbors first. Wayne, Kansas City, or Chicago gets my money.

 

Be sure to rip out all of the non USA parts in it...like the: (and I'm generalizing here)

 

Radio, Window motors, ABS controler, etc.

 

And, last I checked, Mexico was our neighbor.

[mlhm5]

UAW tier 2 wage structure: $14/hour, about 2.4x the minimum wage.

 

Cuautitlan plant: $2.25/hour, or $18/day. About 3.4x the Mexican minimum wage.

 

 

 

It's a sad truth that things are tough all over, and that not everyone gets to have it as good as we do here.

 

It is exploitation plain and simple. Ford is off shoring jobs to a third world country, and most will see it that way. No different than Nike.

 

Plus this is an outright lie - "Ford spokeswoman Alejandra Acevedo said she did not know what starting wages for new hires at Cuautitlan would be".

 

At the same time Japanese companies are building plants in the USA that employ American workers.

Edited June 5, 2008 by mlhm5

[RichardJensen]

It is exploitation plain and simple. Ford is off shoring jobs to a third world country

Ford should build the Fiesta here and sell it in Mexico?

 

Or Ford should make every single car in the US and sell them all everywhere else, so all the mlhms in all the other countries can get mad about Ford off-shoring jobs there?

 

Ford is a global company, bub, and if you don't like it, well, feel free to leave this board forever.

 

BTW, what was the name of that Honda B car that they build here?

[Michael Reynolds]

It is exploitation plain and simple. Ford is off shoring jobs to a third world country, and most will see it that way. No different than Nike.

 

Plus this is an outright lie - "Ford spokeswoman Alejandra Acevedo said she did not know what starting wages for new hires at Cuautitlan would be".

 

At the same time Japanese companies are building plants in the USA that employ American workers.

 

And what sorts of cars, are these Japanese companies making stateside? Let me answer that for you: Tundras, Sequoias, etc.

 

You don't see Fits made here, the Yaris, the Accent, I could go on....

[RichardJensen]

Plus this is an outright lie - "Ford spokeswoman Alejandra Acevedo said she did not know what starting wages for new hires at Cuautitlan would be".

PROVE IT you troll.

[Extreme4x4]

It is exploitation plain and simple. Ford is off shoring jobs to a third world country, and most will see it that way. No different than Nike.

 

Plus this is an outright lie - "Ford spokeswoman Alejandra Acevedo said she did not know what starting wages for new hires at Cuautitlan would be".

 

At the same time Japanese companies are building plants in the USA that employ American workers.

 

Ford has raised the standard of living in that area. They treat their Mexican employees amazingly well. There is housing, food, and health care.

 

Somehow, I believe that Fords type of "exploitation" would be welcomed anywhere in Mexico.

 

How dare Ford better the lives of people in another country............ another country that is our neighbor............ and build a great product that they can actually make a profit on. Those assholes !!!! :rolleyes:

[Cougarpower]

It is exploitation plain and simple. Ford is off shoring jobs to a third world country, and most will see it that way. No different than Nike.

 

Plus this is an outright lie - "Ford spokeswoman Alejandra Acevedo said she did not know what starting wages for new hires at Cuautitlan would be".

 

At the same time Japanese companies are building plants in the USA that employ American workers.

 

 

Last I heard Toyota has on hold there plant that they were going to make for 2010 I dont know of any new mazda plant, Nissan had to layoff employees from their truck plant and will move production of the Titan to Mexico , Toyota had to layoff workers at the texas plant and so on. Remember these companies are not in the business of making cars, they are in the business of making money, back when GM had a lot of investments like with AC parts, hughes electronic , GM train division and all that if GM was managed like GE and the car business was bleeding money they would had sold the car business

[jpd80]

It is exploitation plain and simple. Ford is off shoring jobs to a third world country, and most will see it that way. No different than Nike.

 

Plus this is an outright lie - "Ford spokeswoman Alejandra Acevedo said she did not know what starting wages for new hires at Cuautitlan would be".

 

At the same time Japanese companies are building plants in the USA that employ American workers.

Low wages are the norm in Mexico, F150s were built at the same plant for years.

Hermosillo produces the CD3 triplets presumably on similarly low wages, Fusion must cost less to build than Camry!

 

Funny how some grow a conscience when it suits but ignore the low paid Hispanics and other minorities at home.

[Noah Harbinger]

Question, and there is no offense meant by it, but when you are in the hardware store (or wherever for that matter) do you always ensure that the product you purchase (regardless of cost) is American made?

 

I check the country-of-origin label on almost everything I buy; if there's a US-made version I'll buy it. I'll also preferentially buy something made on the American continent over something made overseas; and I'll buy something from anywhere (including Taiwan) over something made in China.

Edited June 5, 2008 by Noah Harbinger

[mettech]

My next vehicle will be either a Taurus, Escape, or Focus. I'm not interested in buying product built by exploited workers. I know Ford has to stay in business, but I support my country and my neighbors first. Wayne, Kansas City, or Chicago gets my money.

 

 

Agree

[Ford Jellymoulds]

It's sad to see this happening l just hate it when companies use downturns to exploit its workforce but most of Toyota components are made in China on the cheap so giving them a big profit advantage on everything they sell. How do you complete with shit companies like Toyota that make big profits from exploitation, most companies like Dyson the British hoover maker moved production to China to stay in business once one move there the rest of the herd are forced follow them in or go out of business. That's why l go out my way to not buy anything Japanese that exploits and will do anything for profit and market share gain, or Chinese that are getting exploited its very hard to do it 100%.

 

Its very sad to see Americans building Toyota and Honda's to destroy GM & Ford sales and making and sending big profits back to Japan knowing they could both pull the plug in manufacturing in the US at what ever time suit them best.

[lfeg]

Welcome to the world of "lower prices every day". It is ingrained into our culture that we all drive the hardest bargain we can. Every one wants the lowest price on whatever they buy, it is expected. Corporations are run by people like the rest of us, so why should they be different?

 

In Ford's case, I can see why they are doing what they are doing - They are trying to become profitable. The Fiesta produced in Mexico will be sold in other places than the US and Canada, and the wages in Mexico are in the range of some of those markets. You also have to look at logistics, where are the stamping plants and suppliers? To minimize transportation costs you want them close. You want a production facility to be located to minimize the cost of transporting the product to market. Lets hope that sales of the car outstrip capacity, so that production will have to be added at another plant, hopefully in the US or Canada.

[Ford Jellymoulds]

Welcome to the Denso components world, made for peanuts in China making BIG huge profits for the Toyota's of this world that build those "Made in the USA" kit cars that destroy Ford & GM jobs and so forcing Ford out of Detroit to look for a cheaper manufacturing base in places like Mexico.

 

I can understand why Ford chose Mexico the Fiesta is the No2 best selling car in South America. Everytime you buy a Toyota packed to the brim with cheap Denso parts you will be forcing Ford out of Detroit as they have to complete on price or go under, l am sure Ford would love to build everthing in Detriot at heart but cheapskate Toyota are forcing them out how do you complete on price with Denso built kit cars.

 

How would you complete with cheapskate Toyota and Denso component made for peanuts in China put jobs up for 20 bucks a month in Detroit and hope you get some takers.

 

The best answer is to stop buying crap like faulty dodgy Toyota Tundras and so stop Toyota making big bucks in profit and destorying Ford & GM jobs, and end Toyota/Denso exploitation and its HUGE profit margins.

Edited June 5, 2008 by Ford Jellymoulds

[jpd80]

Problem is Ford and GM are now sourcing parts from China too!!

[mlhm5]

Ford should build the Fiesta here and sell it in Mexico?

 

Or Ford should make every single car in the US and sell them all everywhere else, so all the mlhms in all the other countries can get mad about Ford off-shoring jobs there?

 

Ford is a global company, bub, and if you don't like it, well, feel free to leave this board forever.

 

BTW, what was the name of that Honda B car that they build here?

 

Honda never waved the American flag and told buyers to be patriotic and buy American. Sorry, but Ford played the patriotic card a little too often over the past 30 years to get away with, "sorry we are a global company now and if you don't like it, bub, that's just tough"

 

Nike got tons of crap for doing the same thing Ford is doing.

[mlhm5]

Be sure to rip out all of the non USA parts in it...like the: (and I'm generalizing here)

 

Radio, Window motors, ABS controler, etc.

 

And, last I checked, Mexico was our neighbor.

 

Well then you must not mind all those "neighbors" sneaking across the border and taking the jobs "Americans don't want to do".

 

Why not just allow the Mexicans to move into Ford factory towns here in the USA and work. Why does Ford have to spend all that money setting up a factory in a separate country.

 

Works for the meat packing industry.

[ANTAUS]

Well if they don't think it's fair, they dont HAVE to work. If you have empty job position and no one fills them up, then it's a clue that you aren't paying enough, but I dont see them have a shortage, so they should be happy. And if they dont appreciate it, we can always build assembly plants in Africa..I hear they are starving overthere...

[goinbroke2]

I'm so glad I have the "ignore" option, I don't know and don't care what the fucking idiot mlm5 is saying.

I just wish I didn't even have to see the "you chose to ignore" line.

Delete his account, please.

 

 

He's a waste of oxygen, kill it before it breeds!

[Edstock]

Welcome to the Denso components world

Great post, J-M.

[mlhm5]

Welcome to the Denso components world, made for peanuts in China making BIG huge profits for the Toyota's of this world that build those "Made in the USA" kit cars that destroy Ford & GM jobs and so forcing Ford out of Detroit to look for a cheaper manufacturing base in places like Mexico.

 

I can understand why Ford chose Mexico the Fiesta is the No2 best selling car in South America. Everytime you buy a Toyota packed to the brim with cheap Denso parts you will be forcing Ford out of Detroit as they have to complete on price or go under, l am sure Ford would love to build everthing in Detriot at heart but cheapskate Toyota are forcing them out how do you complete on price with Denso built kit cars.

 

How would you complete with cheapskate Toyota and Denso component made for peanuts in China put jobs up for 20 bucks a month in Detroit and hope you get some takers.

 

The best answer is to stop buying crap like faulty dodgy Toyota Tundras and so stop Toyota making big bucks in profit and destorying Ford & GM jobs, and end Toyota/Denso exploitation and its HUGE profit margins.

 

Whoa! Ford is a global company and cannot complain when other global companies act globally.

 

No one forced Americans to buy Hondas and Toyotas, unless you want to blame bad management and a philosophy that focused on quarterly results instead of solving a consumer need.

 

I really don't have to go back too far to make that point. Ever heard of the PNGV Program?

 

This federal program was enacted one year after Toyota announced the Earth Charter, a document outlining goals to develop and market vehicles with the lowest emissions possible.

 

The PNGV Program was funded with $308MM in 1995 and by 1997, participants had settled on the specs of the “super car,” as it became known: the sedan would be a lightweight, diesel-electric hybrid. (Diesel engines, because they use a higher compression ratio, consume less fuel per mile than gasoline engines do.)

 

By 2000, the Big Three had all produced concept cars, which were unveiled with much fanfare at the North American Auto Show, in Detroit. G.M.’s car, which was called the Precept, came equipped with two electric motors, one mounted on each axle. Ford’s Prodigy featured an aluminum body and rear-facing cameras in place of side-view mirrors, and the Dodge ESX3 was made in large part out of plastic.

 

The concept cars were wheeled out, then wheeled away, never to be seen again.

 

Toyota had launched the Prius in 1997, only 5 years after announcing the Earth Charter.

[LSFan00]

I consider Mexican built vehicles to be American-made. Inflation in China, and Mexico, is rising with the industrialization taking place. The growth at this plant is a drop in the bucket, but it's a drop in the right bucket.

 

I'd be pissed if they had decided to build these at a UAW plant in Michigan.