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The real reason Ford abandoned its plant in Mexico has little to do with Trump

President-elect Donald Trump threatened to impose a "big border tax" on General Motors. (Video: Reuters)

Ford chief executive Mark Fields said Tuesday the automaker was ditching its plans to open a factory in Mexico and instead expanding a Michigan plant, creating 700 more local jobs.

The next wave of workers in Flat Rock will build mostly self-driving and electric cars, including a hybrid Mustang. Unlike manufacturing roles of decades past, though, the jobs will probably require computer literacy and more than a high school diploma.

“The era of the electric vehicle is dawning,” Fields told his employees this week, “and we at Ford plan to be a leader in this exciting future.”

The new employment opportunities — the tickets to the middle class — will not look like the old ones. Economists say auto manufacturing at Ford and beyond will become increasingly automated, resulting in fewer jobs for more highly skilled workers.

Ford’s move became political after Fields expressed confidence in the business climate under President-elect Donald Trump, and Trump on Twitter took credit for the company’s decision. Both men invoked the importance of protecting American jobs.

Analysts, though, say Ford’s decision stemmed more from its long-term goals than the new administration or devotion to U.S. workers. The company aims to invest $4.5 billion in electric vehicles by 2020. (The company would not comment on the specifics of the 700 new positions.)

"We expect a big change in the next decade on not only the growing affordability,” Fields said, “but also the consumer acceptance of electrified vehicles.”

The Ford engineers, tasked with creating these models, work in Dearborn, Mich. — 20 miles from the Flat Rock assembly plant. Moving production to Mexico would have made their jobs harder, said Brett Smith, an auto analyst at the Center for Automotive Research in Ann Arbor.

“Keeping a new technology near the engineers is an important thing, at least in the first generation,” he said. “That gives them a lot more control to monitor a system.”

Ford's vision for the updated Michigan facility, meanwhile, meshes with broader industry trends, he said.

“Each iteration of a facility becomes less like old school manufacturing and more high-tech,” Smith said. “That will ultimately mean fewer jobs. The people will have to keep learning throughout their careers. It won’t be like the old days, when you do the same thing for 40 years.”

[Manufacturing jobs are returning to some places. But these jobs are different.]

Donald Trump said that his administration will crack down on what he referred to as "foreign trade abuses" during a rally in Cincinnati on Thursday. (Video: The Washington Post)

It’s also easier for companies such as Ford to find skilled workers in the United States, said Mark Muro, who studies economic policy at the Brookings Institution, a Washington think tank.

“The Mexico platform is essentially a lower cost, just-good-enough workforce,” he said. “It is not a place where there's a lot of innovation or new product development.” (Ford will continue to make gasoline-powered Focus vehicles at its Hermosillo, Mexico, plant.)

Fields was blunt about why Ford changed its mind, canceling a $1.6 billion factory slated for San Luis Potosi. "The reason that we are not building the new plant,” he said, “the primary reason, is just demand has gone down for small cars.”

The president-elect has argued that trade policy has quashed American livelihoods, encouraging businesses to seek cheaper labor in other countries. He has criticized Ford, General Motors and Carrier on Twitter for shuttling work south of the border.

A study last year from the Center for Business and Economic Research at Ball State University, a school in the manufacturing heartland, tells a different story. Co-author Michael Hicks, an economics professor, found that advances in technology caused far more job loss. That’s because automation has enabled factories to produce more goods with fewer people.

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