Ford building $1bn manufacturing complex in India

AFP - US auto giant Ford has started construction on a $1 billion manufacturing and engineering complex in India as it bets on the country to help drive global growth, a company statement said on Tuesday.

The new manufacturing facilities in Sanand in the western state of Gujarat will create 5,000 jobs, and will be able initially to produce 240,000 vehicles and 270,000 engines a year, Ford said.

france24.com/en/20110906-ford-building-1bn-manufacturing-complex-india#comments

Government running another company out this country. Bet over there the 5,000 jobs will not be union. Just a guess.

What do you mean? I didn’t see any explanation in the article about Ford’s decision other than a desire to market cars in India more extensively than it has in the past.

I could see where building the cars there would make sense, though. Not only is labor less expensive, but it saves the cost of international shipping. Minimizing cost is likely to be key to selling in India, and other nations with developing economies, where consumers have less money to spend. And by building in India, Ford may be able to avoid some of the nationalistic objections to “foreign” cars.

Exactly. It is no different than the Hondas and Toyotas that are built in the US. The states who have their manufacturing facilities and the workers who work there are also thankful, I’m sure.

I agree with this. If Ford is building there in order to sell there, then good for them. If they are building there in order to sell there and to us, then not so good.

It’s a billion dollar car plant in a country that has an individual average income of $500 a year. Think about it.

Ford didn’t build car plants in Mexico to sell cars to Mexicans (they have an average income of over $6000 per year), they built them there to ship back to the US. If the Japanese, Koreans and Germans can ship cars to the US and be price competitive imagine what Ford can do with India’s much cheaper work force without the fear of drug cartels raiding plants and killing managers/workers like they have to worry about in Mexico.

Exactly. India is a place where most cars sold are small and cheap. There would be no profit for Ford to export cars to this market. They are also expanding in China for the same reason. I see absolutely no problem with this as it allows them to increase their profits which is good for us here at home as well.

It is generally good when automakers build cars in the markets they sell them in. Toyota, Honda, Hyundai, Kia, and Volkswagen build many of their popular cars in the US and Canada for sale in North America. Many of them recently expanded their US operations which is good for our economy. I’m sure it also helps them back home which is fine. It is the same situation for Ford in India.

I work in the industry as an analyst and I think Ford is doing a lot of good things right now.

They will not be exporting these cars to the US, they will be for Asian sales. Ford sells cars built in Mexico in the U.S. because NAFTA allows them to do so without dealing with importation taxes.

Source?

How does Korea and Japan profitable export cars to the US? Their country’s labor costs are 30 to 40 times higher than India’s.

My source is that I am an auto industry analyst privy to this information. Trust me, Ford will not be exporting Indian models to the US. They do currently import the Transit Connect from Turkey though as it didn’t make sense to bring the platform here for production. They will also be importing the Ford Tranist (large van) in a few years.

Japan doesn’t really export that many cars to the US. Most Toyotas and Hondas sold here are built in North America. Toyota actually builds more cars here than Chrysler. It is true that most Lexus models are imported, but they are marked up sufficiently to make a profit. The same is true for other models they import. How are they profitable? They are efficient.

The Koreans have actually been investing in the US as Hyundai/Kia has grown extremely fast over the last two years. Kia just opened a new plant in Georgia last year and it is already over capacity and will be expanding.

Really, I am too. :smiley:

What are the odds?

Who said Ford would export Indian models to the US? They build models specifically for export just like Japan and Korea do.

I work in the auto industry and know of companies that sent work to India. In fact, a company I worked for. It wasn’t out of compassion for the Indian people, it was because they worked for peanuts.

Wow, interesting! I’d love to ask who you work for and divulge more about my job, but I don’t know if that would be wise in a public forum. I’m not an analyst in the sense of stocks or the overall business, I actually look at model, sales group, OEM, and segment type detail. Most our clients are suppliers, not brokerage firms and the like.

Oh, I thought you implied they would export to the US, I misunderstood. :blush:

Ford will no doubt use some of the profits generated by this plant to lobby Congress to make sure no laws get passed to prevent them from doing what they’re doing: manufacturing in areas that care little for paying workers just wages and creating a safe work enviromnent; they are escaping the “onerous regulations” that apologists for this sort of thing keep complaining about.

Greed and the desire to maximize profit can only take you so far. Sooner or later, wealth gets so concentrated that no one will be able to afford the products you produce, no matter how cheaply they are made.

If I were Ford, I’d be opening plants right here in the US and paying my workers at least double what they’re making now. They make the mistake of considering wages as a cost, whereas they should be counted as an asset. Without the worker and his wage, the product won’t get made and the economy doesn’t grow. Labor and capital need each other to produce wealth.

And you wouldn’t be in business very long as your cars would have to be priced at ridiculous levels in order to turn a profit.

Auto workers on the assembly line have very good started wages for people with nothing but a high school education.

. I get e-mails from Indian CPA firms about once a month offering to handle my firms bookkeeping for small businesses for $6.00 an hour with no benefits and no payroll taxes. I have not availed myself of this but some of my competitors have.

The difference is Ford’s new plant in India doesn’t compromise American jobs. These cars won’t be sold in the US.

Source?

I did.

It made me ill. They would get these people to work for a fraction of what our workers here earned and demand them to turn the work around in a day. They must have worked all through the night. Then they would treat them horrible because there were guys down the street willing to pump out the work for almost nothing as well.

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