{"id":24623,"date":"2017-11-15T18:08:08","date_gmt":"2017-11-15T23:08:08","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/should-ford-lead-the-defense-of-globalization\/"},"modified":"2017-11-15T18:08:08","modified_gmt":"2017-11-15T23:08:08","slug":"should-ford-lead-the-defense-of-globalization","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/should-ford-lead-the-defense-of-globalization\/","title":{"rendered":"Should Ford Lead the Defense of Globalization?"},"content":{"rendered":"

The Rise of Trump <\/strong><\/p>\n

Over the last four decades, the world has benefited immensely from globalization and free trade.\u00a0 Hundreds of millions of people have been brought out of poverty, standards of living have increased, and billions of dollars of shareholder value has been created [1].\u00a0 Unfortunately, the rising tide has not lifted every ship.\u00a0 In mature economies, such as the United States, some workers have been displaced, and the economic benefits of increased trade have not been distributed equally.\u00a0 This disruption, while acknowledged by political elites, was often dismissed by the knowledge that the overall American economy was enlarged [2].<\/p>\n

This apathy from elites created a feeling of isolation among the American worker precisely when they were the most vulnerable to the economic shock of global trade integration.\u00a0 Feelings of isolation turned to anger as middle-class American\u2019s increasingly viewed trade as a zero-sum game where they were the loser [3].\u00a0 During the 2016 United States presidential campaign, Donald Trump gave voice to this anxiety and promised to lead the nation in a new direction, stating that America will \u201cno longer surrender this county or its people to the false song of globalism\u201d [4].<\/p>\n

Ford Takes a Beating<\/strong><\/p>\n

As one of the largest automotive manufactures in the United States, Ford Motor Company holds an iconic place in the American psyche.\u00a0 It is viewed as a primary driver of the industrialized boom that built the middle class, but its increasing reliance on a global supply chain made it a target for the rising antitrade movement. \u00a0Ford was frequently the focus of Donald Trump’s wrath throughout the 2016 presidential campaign and bore the brunt of his threats to restrict trade [5].\u00a0 These threats gained credibility after Trumps surprise election win, and Ford responded by announcing the cancellation of a new $1.7B Ford Focus plant in Mexico and the addition of 700 jobs in the United States [6].\u00a0 In addition, the CFO of Ford, Robert Shank, stated in an interview in early 2017 that Ford was \u201cexpecting changes in trade and increasing its focus on manufacturing in the united states\u201d [7].<\/p>\n

Investment Turns East<\/strong><\/p>\n

These events appear to be proof that the isolationist, America-first policies advocated by the Trump administration were having their desired effect.\u00a0 Ford was ascending to the new order and manufacturing was returning from abroad.\u00a0 Unfortunately, Ford’s actions did not reflect economic reality.\u00a0 In an embarrassing turnaround, Ford announced that Focus production would be shifted to China, achieving $1B in cost saving.\u00a0 This was followed by a $700M joint venture in China to manufacture electric vehicles [8]. \u00a0To the average American worker, these actions are a betrayal.\u00a0 Ford was highlighting manufacturing in the United States when politically expedient only to shift investment overseas when the storm had passed.<\/p>\n

Defending Globalization<\/strong><\/p>\n

This type of corporate double talk is not just dishonest; it is bad business for Ford.\u00a0 Instead of placating the anti-globalist with meaningless PR, Ford must lead the defense of the free trade policies that are key to its competitiveness.\u00a0 As stated by Matt Blunt, president of the American Automotive Policy Council, \u201cforcing American manufacturers to pay higher tariffs on imported goods would probably encourage companies to shift automobile production outside of the United States\u201d [9].\u00a0 This is because the American auto industry needs to compete in a global marketplace. German manufacturers have access to low-cost labor from Eastern Europe and Japanese automakers utilize supply chains that stretch into China and Southeast Asia [10].\u00a0 In fact, it would benefit the average American autoworker if trade restrictions were loosened.\u00a0 This would allow Ford to access lower cost parts and raw materials, enabling them to manufacture in the United States, instead of shifting production to China [11].<\/p>\n

It is necessary then for Ford to lead the public fight for trade.\u00a0 By hiding in the shadows, they are allowing the isolationists to drive a narrative that will eventually leave Ford facing the wrath of an uncompetitive and unemployed American worker.\u00a0 To support this position, Ford must go beyond advocating for competitive benefits of free trade; they need to convince their workforce that their jobs depend on globalization.\u00a0 This means educating America on how Ford\u2019s foreign supply chain enables jobs in the united states instead of portraying the placement of manufacturing jobs as a digital decision between America and foreign competition.<\/p>\n

Question for the Future<\/strong><\/p>\n

Ford could consider shifts in its relationship with workers to help build a pro-trade coalition.\u00a0 One option would be to implement Germany\u2019s workers council model as a method to make American workers partners, committed to competitiveness, productivity, and profitability [12].\u00a0 As noted by the Heritage Foundation, this has been shown to make the Germany manufacturing sector more resilient than American, especially in turbulent times like the 2008 financial crisis, resulting in fewer layoffs and a more robust recovery [13].<\/p>\n

(800 Words)<\/p>\n

 <\/p>\n

    \n
  1. Warsh, K. and S. Davis, \u201cThe retreat of Globalization,\u201d Wall Street Journal<\/em>, (Oct. 15, 2012)<\/li>\n
  2. Ibid.<\/li>\n
  3. The Economist<\/em>, \u201cThe new nationalism,\u201d (Nov. 19, 2016)<\/li>\n
  4. Ibid.<\/li>\n
  5. Vlasic, B. And N Boudette, \u201cEven Before He Takes Office, Trump Knocks Automakers on Their Heels,\u201d New York Times<\/em>, (Jan. 3, 2017)<\/li>\n
  6. Donnan, Shawn, \u201cIt is crunch time for Donald Trump on trade,\u201d Financial Times<\/em> (Aug. 13, 2017)<\/li>\n
  7. Vlasic, B. And N Boudette, \u201cEven Before He Takes Office, Trump Knocks Automakers on Their Heels,\u201d New York Times<\/em>, (Jan. 3, 2017)<\/li>\n
  8. Donnan, Shawn, \u201cIt is crunch time for Donald Trump on trade,\u201d Financial Times<\/em> (Aug. 13, 2017)<\/li>\n
  9. Swanson, A. and N. Kitroefe, \u201c \u2018Army\u2019 of Lobbyists Hits Capitol Hill to Preserve Nafta,\u201d New York Times<\/em> (Oct. 24, 2017)<\/li>\n
  10. Donnan, Shawn, \u201cIt is crunch time for Donald Trump on trade,\u201d Financial Times<\/em> (Aug. 13, 2017)<\/li>\n
  11. Whelan, Robbie, \u201cU.S Pushes Stiffer Rules for Nafta Car Makers.\u201d Wall Street Journal,<\/em> (Nov. 10, 2017)<\/li>\n
  12. Behrens, Martin, \u201cSTILL MARRIED AFTER ALL THESE YEARS? UNION ORGANIZING AND THE ROLE OF WORKS COUNCILS IN GERMAN INDUSTRIAL RELATIONS,\u201d Industrial and Labor Relations Review<\/em> 62 (April 2009): 3.<\/li>\n
  13. Morgan,\u00a0D. Boccia<\/a>,\u00a0R. Bourne,\u00a0D. Howden,\u00a0A. Alesina, M. Melchiorre,\u00a0V. de Rugy,\u00a0D. Rohac\u00a0and M. Marin, \u201cEurope\u2019s Fiscal Crisis Revealed: An In-Depth Analysis of Spending, Austerity, and Growth,\u201d The Heritage Foundation No. 147, 2014, p. 60.<\/li>\n<\/ol>\n

     <\/p>\n

     <\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    Can Ford defend Globalization and international trade in the face of rising American isolationism?<\/p>\n","protected":false},"author":9613,"featured_media":24624,"comment_status":"open","ping_status":"closed","template":"","categories":[1601,1571,3549,3833,3239,3219],"class_list":["post-24623","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-donald-trump","category-ford-motor-company","category-free-trade","category-internation-trade","category-isolationism","category-nafta","hck-taxonomy-organization-ford-motor-company","hck-taxonomy-industry-auto","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"\nShould Ford Lead the Defense of Globalization? - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/should-ford-lead-the-defense-of-globalization\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Should Ford Lead the Defense of Globalization? 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