Tuesday, May 25, 2010

Reverse offshoring: Ford leads the way

We are so used to companies closing shop and moving abroad to increase profits. How the Obama administration got two birds with one stone.

In the grand scheme of things, 170 jobs is not an enormous amount. The significance, however, is priceless. After two decades of business operations or entire companies relocating overseas to maximise profits and further reduce costs, a world-famous company decided to do the opposite.

Following an agreement with the United Auto Workers union, and with the help of a federal grant, Ford Motor Co. decided to invest $135 million in Michigan to design, engineer and produce components for its next generation of hybrids and fully electric vehicles.

The parts are currently built in Japan and assembled in Mexico. The move will mean 170 new jobs in the Michigan area.

Some observers noted that this could mean that the offshoring tide may be turning, after years and years of companies racing to the bottom for the lowest possible salary around the world.

But this is also good news because "Ford plans to sell five electric or hybrid vehicles in the U.S. by 2012 and Europe by 2013". A sign that President Obama's stimulus programme to boost development of plug-in electric vehicles is now a reality.

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