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Ford Fusion Confusion

By Rich Duprey - Updated Apr 5, 2017 at 6:54PM

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Are we really saving "American" jobs when they build their cars in Mexico?

Ford (NYSE:F) recently won accolades for its new Fusion Hybrid. The gasoline-electric hybrid was canonized as the most fuel-efficient car in its class, getting 41 city miles per gallon.

When you think about it, that's huge. In the city, that's better than the hybrid Camry from Toyota (NYSE:TM) and the Honda (NYSE:HMC) Civic. In fact, it's second only to the fuel-sipping Prius, but since the Fusion is a bigger car than the Hollywood movie star fave, that makes it an even bigger coup for Ford.

This is being heralded as an event that shows Detroit can compete effectively with foreign automakers. When Ford, General Motors (NYSE:GM), and Chrysler jetted into Washington to beg for a handout from taxpayers, they were criticized not only for their corporate fleet of jets, but also their squandering of American manufacturing ingenuity. Now with Ford rising ascendant and GM coming out one day soon with its Chevy Volt, this is seen as vindication for those who said that the Detroit bailout was a necessary event. Just keep Detroit afloat long enough to get back on its feet, and it'll be able to produce eco-friendly cars with the best of them.

So, Detroit got its life raft, but there's a bit of a disconnect here between saving American jobs and lavishing billions on the auto industry.

The Ford Fusion Hybrid won't be saving many U.S. jobs because the car is built in Mexico, right next to the Chevy Silverado and Aveo plants and Chrysler's new fuel-efficient Phoenix Motors plant. In fact, the Big Three have 13 plants in Mexico that turn out 50% of Mexico's auto production, and, according to the Mexican Auto Industry Association, Mexico exports 75% of all production, of which 70% heads to the U.S.

So, let's not wax poetic about what the Fusion Hybrid means for the "American" auto industry. In reality, the industry is really a global one. While Detroit is off building cars in Mexico (and South America, Europe, Asia, and elsewhere), Japanese carmakers are right here in the U.S. building cars and creating American jobs.

The Camry hybrid is built right here in Kentucky, and until auto sales dried up in North America recently, Toyota had planned to move Prius manufacturing capabilities to Mississippi. Without taking anything away from Ford's achievement, so-called Japanese car manufacturers have been building fuel-efficient internal combustion cars here for some time. The Altima from Nissan (NASDAQ:NSANY), for example, gets highway gas mileage in the 30s and is built in Smyrna, Tenn., and in Canton, Miss. It also produces a hybrid version of the Altima at the Smyrna plant.

I'm happy that Ford has won those accolades, and the Fusion isn't such a bad-looking car, either. With size, styling, and power behind it, this could end up being a big seller for the iconic carmaker. Let's just not conflate that achievement with having anything to do with saving American jobs. There is no "U.S. carmaker" anymore, just as calling a Camry, Civic, or Altima "Japanese" is a misnomer. Although politicians sometimes confuse the matter to further their own agendas, it's a global marketplace that won't be assisted by artificially propping up negligent and incompetent management through loans and bailouts.

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Stocks Mentioned

Ford Motor Company Stock Quote
Ford Motor Company
F
$12.01 (3.89%) $0.45
Honda Motor Co., Ltd. Stock Quote
Honda Motor Co., Ltd.
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Toyota Motor Corporation Stock Quote
Toyota Motor Corporation
TM
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GM
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