Ford’s Mulally on China, Trade

Allen Mulally, CEO of Ford, was a guest on “CBS This Morning” today.  When asked about the complaint filed with the World Trade Organization by the Obama administration about Chinese subsidies for their auto industry, Mulally dodged the question and gushed praise for trade with China, noting that the Chinese auto market is even bigger than the U.S.  (I can only assume he was talking about the potential  Chinese market, as far fewer autos are currently sold there than in the U.S.)  He also praised President Obama’s trade deal with Korea and free trade in general. 

Like other CEOs of other companies, Mulally is focused on one thing only – total sales volume and profits.  He couldn’t care less where Ford builds its cars.  If it builds cars in China and sells lots of them there – great.  If it builds Fords in Mexico and sells lots of them in the U.S. – that’s great too.  If building some of them in the U.S. makes a great selling point for the “buy American” consumers, then that’s what they’ll do.  More trade equals more potential customers.  For that reason, Ford and every other company will support any politician who promises more of it. 

There are a couple of points that need to be made here.  As I pointed out in Five Short Blasts, the interests of corporations have long since diverged from the interests of the common good of Americans.  What does Ford care if America is bankrupted by an enormous trade deficit with China?  That’s of no consequence to them.  All they care about is selling more cars to the Chinese.  Meanwhile, Americans are put out of work and the government runs huge deficits to offset the negative effects of the trade deficit. 

Secondly, I’ve been saying for some time that nothing will change until economists grow spines, pull their heads out of the sand and once again consider the full spectrum of economic consequences of population growth.  In the meantime, our leaders will continue to take their economic advice from economists wedded to a flawed 19th century trade theory.  But I’m afraid it’s worse than that.  Even if economists did come to see that free trade with overpopulated nations is a sure-fire loser, the people who bankroll political campaigns still won’t care.  They’ll continue to pay their politicians for policies that serve their interests. 

It would take a grass roots uprising by voters, demanding that the newfound wisdom of economists (if you can imagine such a thing) be heeded, and it would take a strong leader who puts America’s interests first above all others to really make a difference.  Any one of these three things is unlikely.  A combination of the three happening in concert seems almost beyond the realm of possibility. 

Sorry for the pessimistic outlook but, since writing Five Short Blasts, my appreciation of the challenges associated with changing the course of globalization has steadily grown.  Nevertheless, I’ll keep plugging away at trying to make a difference. 

Hey, Mulally, I’m more glad than ever that I bought a new Chevy Malibu last year instead of that Mexican-made Fusion your people tried to sell me!

2 Responses to Ford’s Mulally on China, Trade

  1. Tom T. says:

    I couldn’t agree with you more on this one.

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