Trump is right, for once

Ford Motor Company has just announced that it is moving some commercial truck manufacturing from Mexico to the Cleveland area, which will save 1,000 unionized American auto jobs. Did Donald Trump notice?

With high-priced trucks, Ford can afford to use Ohio union members who may earn $50 an hour in pay and benefits. It must sell those trucks for $70,000 or more to make a profit.

The global economy works despite Trump.

Lending his name to a luxury hotel in Baku, Azerbaijan for $2.5 million in annual royalties is not the same as building multibillion-dollar factories and training thousands of workers. Trump has no experience at managing robotics, buying millions of parts, assembling cars at 10 man-hours per car, then moving them to markets all over the world.

{mosads}American car companies have been building cars in Mexico since the 1920s. They were joined by Nissan in 1961 and there has been a crush of companies from Europe and Asia moving into Mexico that has caused heads to spin. Skilled, highly paid (by Mexican standards) autoworkers means a bigger Mexican middle class, which hit 53 percent of the population in 2013 and growing.

BMW is building cars in Toluca. Mercedes is making trucks in Mexico State, buses in Monterrey and trucks in Saltillo. Fiat Chrysler is building cars in Toluca and Ram trucks in Saltillo. Ford is building cars in Mexico State; engines, transmissions and parts in Hermosillo, as well as cars. General Motors builds cars in San Luis Potosi and Coahuila and trucks in Guanajuato. Honda makes cars in Jalisco and Guanajuato. Nissan is building cars and trucks in Aguascalientes and cars, trucks and taxis in Morelos State. Toyota builds its trucks in Tijuana. And, the largest factory of all — the Volkswagen plant in Puebla (16,000 workers) — builds all the VW Bugs we see on our roads.

South Korea’s Kia is coming. Germany’s Audi is coming. Nissan and Mercedes are building a joint plant to produce Mercedes SUVs and Infiniti luxury cars. Michelin, Goodyear and Pirelli Tires are building huge plants to make millions of tires for Mexican-made cars. Bridgestone announced that it is enlarging its current facilities in Cuernavaca (south of Mexico City). Even with those plants, Mexico will still have to import millions of tires for their new cars.

All of this activity is a boon to American workers, because “Mexico isn’t taking jobs from the U.S.,” Eric Farnsworth, vice president at the Council of the Americas, told Fox News Latino. “Because of integrated supply chains, up to 40 percent of the content of the products Mexico exports comes from the U.S.”

According to the same article, trade supporters “argue that U.S. companies working in tandem with partners in Mexico can out-compete manufacturers in Asia and help build up the industry on both sides of the Rio Grande.”

In 2014, Mexico built 3.2 million cars in 18 factories. It is now the seventh-largest carmaker in the world and the fourth-largest exporter of cars, 70 percent of which go to the U.S.

How has Mexico reached this advanced level of manufacturing?

Is it because Mexican leaders are smarter than American leaders, as Trump claims (while calling American leaders “stupid”)?

Bingo: Trump’s right, for a change!

Mexican leaders are smarter than American leaders and, especially, labor union honchos, because Mexico has truly embraced free trade, negotiating 45 free trade agreements with countries around the world, including 21-year-old NAFTA. That is more than double the number of U.S. free trade agreements. American union leaders fight all free trade agreements.

As Thomas Karig, vice president of Corporate Relations for Volkswagen de Mexico, told The Globe and Mail (Toronto), “You can export duty-free from Mexico to big automotive markets in the world — except China of course — North America, South America, European Union, Japan. … There’s no other country in the world that has these kinds of advantages.”

Volkswagen built 475,121 Beetles, Golfs and Jettas at Puebla in 2014 and exported 80 percent of them to 100 countries.

The Mexican car industry became an issue in the 2016 presidential campaign when Ford announced it was building a new $2.5 billion plant in Mexico.

Ersatz candidate Trump blew a fuse and exclaimed, “I’ll actually give [Ford] a good idea. Why don’t we just let the illegals drive the cars and trucks right into our country?”

Trump huffed and puffed that he would tell Ford’s CEO, Mark Fields, “[T]he deal is not going to be approved, I won’t allow it. I want that plant in the United States, preferably here [Michigan]. … So then I only have one question: Do they move the plant to the United States the same day or a day later?”

The president has no power to do what Trump says he would do. There is nothing in the Constitution that allows a peacetime president to demand anything of this sort of Ford. Ford needs no American approval to build in Mexico. A president is not a dictator; he or she is not Benito Mussolini. Ford’s CEO knows that, even if Trump doesn’t. So do the federal courts.

Advice from one auto analyst Trump should pay attention to: Paul Lacy of IHS Automotive Advisory Services says that “we’re better off working with Mexico than we are without Mexico.”

Contreras was formerly syndicated by Creators Syndicate and the New American News Service of The New York Times Syndicate.