January 27, 2006

Ford Flops While Toyota Takes Off in Baja

US automaker Ford’s announcement this week of 14 plant closures and the lay-off of almost 25 percent of its North American workforce signalled further shifts in the global auto industry. While US communities in the Midwest struggled to cope with the bad news for their local economies, officials in Baja California celebrated good news on their end of the global auto assembly line. Joined in a press conference by Toyota executives Robert Reid and Jun Umemura, Baja California Governor Eugenio Elorduy Walther announced a new $37 million-dollar investment by Toyota in its El Gandul Tijuana assembly plant.

“The increased production at Toyota is magnificent news, because it represents the confidence the company is putting in Baja California while streng-thening its presence in our region,” Governor Walther said. “At the same time, it symbolizes and reemphasizes confidence in the talent and creativity of our people who colloborate with this company.”

Toyota manufactures Ta-coma pickups and parts at the Tijuana plant. Added to a $140 million-dollar investment in 2004, the latest infusion of capital, is expected to more than double the production of pickups. Ninety percent of Toyota’s Tijuana production is destined for export, principally to California, Texas and Florida. New jobs are anticipated at the Japanese auto-maker’s El Gandul plant, but no specific numbers were announced at the press conference attended by Governor Walther and Toyota executives. Currently, the company employs more than 1,000 assembly line workers and support personnel at the El Gandul factory.

Meanwhile, spokespersons for Ford supplier companies Coclisa Chamizal and Delphi in Ciudad Juarez said they do not anticipate any immediate negative impact on their operations from Ford’s announced plant closures.

Ciudad Juarez business analyst Ramiro Villelda said his city might actually benefit from Ford’s strategy to cut labor costs, which reach $61 dollars per hour in the United States under the Ford-United Auto-workers Union contract. Ford posted about $1.6 billion dollars in losses for 2005.

Reprinted from Frontera NorteSur (FNS): U.S.-Mexico border news Center for Latin American and Border Studies, New Mexico State University, Las Cruces, New Mexico.

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