WCA March 2018

From the Americas

Mr Boudette pointed out that few industries are affected to a greater degree by the accord than the auto sector, which has rushed to build plants in Mexico over the last several years to take advantage of lower labour costs and that country’s extensive network of trade agreements. Automakers have worried that changes to the trade accord, such as rules requiring the use of more American-made parts, could raise the cost of vehicles produced in Mexico and hurt the value of the plants that have been built there. In late November, Vice President Mike Pence met with top executives from Ford, General Motors and Fiat Chrysler to discuss trade and the renegotiation effort.  Ford finessed its change in plans, reported first by the Wall Street Journal and confirmed by the company, by sweetening the Mexico news with a bonus for Michigan. Mr Marakby told the Times that plans for Flat Rock, 25 miles southwest of Detroit, had been revised. Ford will now invest $900 million in the Flat Rock location, up from a previously announced $700 million. The company said the retooling for autonomous vehicles would create 850 jobs there, 150 more than originally reported. Because Ford says it expects the market for self-driving cars in taxi and delivery fleets to grow rapidly, it sees the Flat Rock plant playing a major role after the first models are rolled out in 2021. “We want to make sure we have the capacity at Flat Rock when we launch,” said Mr Marakby. “We are very optimistic that we will grow the volume in the autonomous business.”  Ford’s change of mind about building in Mexico drew no immediate public comment from President Trump. Key to the fortunes of electric vehicle makers, higher-powered (350 kilowatt) charging stations are on the way It is generally accepted by automotive experts that 15-minute charge times are key to bringing electric vehicles (EVs) on par with their gasoline- and diesel-powered counterparts. Currently, an EV owner has access only to chargers that deliver 150 kilowatts (kW), and 30 minutes is needed for charging the car’s batteries to 80 per cent capacity. But chargers capable of 350kW of output are in the offing. As reported in Green Car Reports , Europe plans to have several thousand 350kW chargers in operation by 2020. Porsche has factored their availability into its plans for that year, set for the launch of the company’s Mission E electric sedan. To demonstrate the technology, last summer Porsche installed a 350kW 800-volt solar-powered charging station at its Berlin-Adlershof branch. The endorsement by some analysts of Porsche’s projection of 200 to 250 miles of range for its new luxury car was not lost on Honda, for one. As noted by Mark Stevenson of Green Car Reports , ”With Porsche promising ultra-fast charging for its Mission E electric car, Honda isn’t going to let the German automaker keeps its 15 minutes of charging fame.”

Automotive To oblige Donald Trump, Ford Motor agreed to renounce Mexico as the site of a new car plant – until expedience dictated otherwise With sales of electric cars expected to soar as China and European Union countries push automakers to cut tailpipe emissions, two facts are pertinent: 1) because batteries are costly and sales volumes low, electric vehicles (EVs) are expensive to build and generate thin profit margins, or even lose money; and, 2) auto workers’ wages in Mexico rarely exceed $10 an hour, compared with about $29 an hour in the United States of America. “If you’re worried about your margins on your EV, moving production to Mexico is not a bad idea,” Mike Ramsey, an automotive analyst at Gartner, told Neal E Boudette of the New York Times . Accordingly, Ford Motor Co said in December that it will begin assembling a battery-powered sport-utility vehicle in a plant in Cuautitlán, north of Mexico City, in 2020. The car is projected to cover 300 miles before needing a battery recharge, which would give it greater range than any EV now on the market. As part of a broader, global strategy, Ford plans to follow that model with at least 12 more EVs. If the Ford news generated more interest than the average announcement from Detroit, the reason was not far to seek. As a presidential candidate in 2016, Donald Trump challenged the patriotism of American companies which locate manufacturing facilities elsewhere. After heavy criticism from Mr Trump, in January, in the days leading up to the inauguration, Ford cancelled plans to build a $1.6 billion car plant in Mexico. The company announced that it would instead equip its Flat Rock, Michigan, factory to make electric and hybrid models. As noted by Mr Boudette, “That drew compliments from the president-elect.” NAFTA talks stir new concerns Mr Trump (who also criticised General Motors for importing Chevrolet hatchbacks from a Mexican plant) chalked up an early public relations victory, but one which apparently has not survived a Ford cost-benefit analysis. Sherif Marakby, the company’s vice president for autonomous vehicles and electrification, told the Times that producing electric cars in Mexico will enable Ford to take advantage of lower labour costs and improve the “fitness” of that business. (“Ford Will Build Electric Cars in Mexico, Shifting Its Plan,” 6 th December) The Ford switch came as the Trump administration has been pushing to renegotiate the North American Free Trade Agreement (NAFTA) with Canada and Mexico.

BigStockPhoto.com Photographer: Aispl

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Wire & Cable ASIA – March/April 2018

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