Will The Ford Motor Company Abandon Michigan First, And Then, Ultimately, The United States?

Implications: Ford sold 216,000 cars in China in 2007 including a few thousand Jaguars, Land Rovers, and Aston Martins, brands it will shortly no longer own or manufacture. This number represents neither a large market share in China, some much smaller Chinese car companies have larger unit sales, nor any competition to General Motors, which sold almost 1 million cars in China in 2007. The interesting aspect of this story is that Ford now has 3 (admittedly, for the moment, joint venture) assembly plants in China, a design center, and, most importantly, a 'sourcing' operation.

Analysis: William Clay Ford, Jr said in Shanghai last year that 'his' company, the Ford Motor Company, plans to ultimately produce only thirty percent, in total, of its needs in the United States. He said, less than a year ago, in other words that Ford's plan was to reinvent itself as a vehicle assembler only in the US.

Interestingly enough and completely overlooked so far by the American press is the fact that every Western car company began its operations outside of its native country by shipping 'cars, knocked down,' CKDs to overseas markets where low skilled labor needed only to put them back together and add non production components such as hydraulic fluids in order to 'prep' them for the showroom.

Oh, how the times have changed. Today Ford is on a path to reverse or invert history; it hopes to assemble vehicles in and for the US market, which vehicles, themselves, are essentially entirely made in low labor cost countries and shipped everywhere as 'Super CKDs."

Ultimately this plan would mean that cars can even be styled in China, engineered in India, and built anywhere from components built anywhere and shipped, just-in-time, to an 'assembly plant.'

In fact Ford is well on the road to this goal, and the company's financial plan is only to survive until the transformation is complete.

The emphasis lately on what the American OEM automotive industry portrays as 'green high tech' is a smokescreen. It makes it look as if Ford is an American high tech company doggedly following the Congressional mandate to lower emissions and dependence on foreign oil. In fact Ford is just buying time while it hurriedly packs to get out of Dodge (Detroit).

The bulk of contemporary research on hybrid batteries and catalyst materials for fuel cells and catalytic converters is being done in China by its vast numbers of relatively low paid, supervised by western educated managers, scientists and engineers.

Ford, itself, has a program underway to move engineering specification operations to India within a year. In the short term these offshore engineering groups will be supervised from Dearborn, but that will be only until the kinks have been iron out. After all, engineering specification design and management is a truly global responsibility and as Ford's presence in the US market shrinks as a proportion of its total sales it will be mandatory to centralize function such as engineering specification management in places where it is most efficient economically for the global market.

Likewise as China corners the raw materials and their markets that are critical to the production of, for example, vehicles and their power trains, the wisdom of Ford's sourcing office in China will become obvious.

Western analysts of raw material sourcing go out of their way to not notice that the Chinese government now essentially taxes, and thereby raise the prices above world market, all exports of strategic raw materials, so that it is only economical to use them to make finished goods in China.

The hundreds of thousands of auto workers being cast adrift in Michigan will never again work in the auto manufacturing industry, because although Michigan will probably be a world-class automotive engineering and design center for another generation the only direct employees of the OEM global automotive industry physically working in Michigan will be highly skilled, educated, and experienced engineers and, for a time yet, financial managers.

The activist environmentalists who shut down America's natural resources production and the union organizers who made Michigan, among other places, no place for auto makers will have achieved their dream by 2020. Michigan will be an agrarian state and the coyotes will roam where once Ford made cars and trucks.