If there is one thing that we can pull from this latest round of contract negotiations between the Detroit three and the UAW is that amount of car production that will be heading to Mexico.
According to a report from Automotive News, Ford and Fiat Chrysler Automobile will have moved production of most of their mass-market vehicles from the U.S. to Mexico. General Motors will be the only Detroit automaker who is keeping some sort of production of their compact and midsize cars.
Why the shift to Mexico? It comes down to what vehicles make money for the three automakers. Currently, pickups and SUVs carry a much higher profit margin than cars.
"You can afford to pay a little more when you're making trucks, but the structural change in the industry has been so huge that I was kind of surprised by that -- trucks here and cars in Mexico," said Dave Cole, chairman emeritus of the Center for Automotive Research.
But some point out this change in production could put the Detroit three in a situation they found themselves back in the early 2000's with sales of SUVs dropping due to the increase in gas prices.
Models that will be moving to Mexico include the Chrysler 200, Dodge Dart, and Ford Fusion.
Source: Automotive News (Subscription Required)
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