Manufacturing an Unnecessary Crisis: Ford Motor Co. and the Necessity of Openness

Worries over the state of American manufacturing jobs were exacerbated when news broke earlier this year that Ford Motor Company had plans to move some of their small car production to new plants in Mexico. Although the central story was true—Ford is indeed in the process of opening an assembly plant in Mexico that will produce their Focus and C-Max models—many exaggerations and false rumors surrounded the deal and worked up a huge public backlash towards the automaker, much of which was entirely avoidable.

Ford found itself in the unenviable position of having to announce their plans to open a plant in Mexico during the worst possible time. Trade policies, concerns over manufacturing, and anger at the outsourcing of American jobs were always going to be issues central to the 2016 Presidential election, but a year ago no one could have guessed just how emotional they would become. In a stunning reversal of precedent, both the Republican and Democratic nominees have found themselves opposed to the major free trade deal of the day, with their bases pushing them to be harder than ever before on American corporations for participating in globalization. Republican nominee Donald Trump has been particularly critical of the move.

This has resulted in a PR nightmare for Ford, who has seen much the public goodwill they received for turning down the government bailout during the most intense part of the financial crisis dry up. They’ve been forced to go on the defensive, initially by evading initial reports about their plans, calling them mere speculation. In April of this year, they finally admitted that they were in fact planning on opening the $1.6 billion Mexico plant, sparking intense criticism from the UAW.

It wasn’t until the middle of September that Ford decided to give the full details, which were, by that point, already widely known: small car production, specifically of the lower-selling Focus and C-Max, would indeed be moved over to the new Mexico facility over the course of the next couple of years. They took a major hit in the press, and Trump slammed this decision in Monday Presidential debate.

Ford, meanwhile, has been forced to defend their decision through a massive PR campaign. According to them, the move of small car production outside of the US will not affect any current employees. They’ve stated repeatedly that not one American job will be lost to Mexico, but that rather, national factories will be able to focus (no pun intended) on the production of new vehicle models.

There are those who won’t be satisfied by this answer, who feel that even thought the Mexican assembly plant may not result in the loss of American jobs, the 2,800 new positions that will be created on the other side of the border should have gone to Americans. Ford has answered this criticism by pointing towards the fact that they are a global brand competing in the global market, and by necessity they cannot manufacture wholly in the US. They also point to the harsh realities of said global market—labor costs in Mexico are substantially lower than those in the United States, thanks to the difference in unionization between the two nations’ labor forces.

This production decision was never going to be free from controversy and political blowback. Like the other major issue of the day regarding the America’s place in the global economy, the Trans-Pacific Partnership (TPP), the deal in place is messy and complicated, and it can never hope to satisfy all sides. However, it was Ford’s responsibility to inform people—most of all their workers—of their plans once they had them in place, rather than teasing them out, as they did starting in the summer of 2015. Their ultimate justification behind their decision may or may not have been accepted in the press and by the public, but at least they would have gotten out ahead of the story, avoided the anxiety and uncertainty that spread thanks to the mingling of the sparse amount of facts compared to the quickly mounting rumors, and have been in a better place to respond to the political rhetoric that bombarded them.

The lesson to take from Ford’s disastrous PR year is that openness and honesty are a benefit to companies, especially those in manufacturing, where tensions have run high for decades. The public craves authenticity, now more than ever, and companies and corporations that fail to recognize this risk falling prey to pre-conceived notions regarding corporate greed and profits-over-patriotism, further bridging the gap between themselves and their consumer base. Fears over the state of American manufacturing may not be alleviated any time soon, however, by being open about their plans; major companies can keep them from growing worse.

Photo credit: thetruthaboutcars.com