Mexico Deal An Oasis For Car Industry
In the wake of yesterday’s news about the new agreement with Mexico car manufacturer’s stock is on the rise. Not only did American companies GM, Fiat Chrysler, and Ford all see around a 3% increase in stock value. Even Asian companies like Toyota pounced on the opportunity to make deals. Although this is good news for American companies their stock is still down on the year. Things are looking up though! As we said Toyota made a deal announcing it would invest have a billion dollars in Uber. Trying to boost up its presence in the ride-sharing giant who is gaining ground on the market. One of its main competitors Didi the Chinese service is in hot water again. As one of their drives killed a passenger last week! This Mexico deal is not only good news for American automakers but great news for workers in the auto industry in general in the United States and Mexico!
Work In The Car Industry? You Have Reasons to Smile
There are two main agreements in the new deal that you should be aware of. Especially if you happen to work in the car industry. First, the agreement requires 75% of a car’s value to be manufactured in North America. Up from NAFTA’s current level of 62.5%. That goes for all manufacturers not only American companies. The second agreement states that 40% to 45% of the car to be made by workers earning at least $16 per hour. This means that around 40% of the car is likely to be manufactured in the United States. Workers in Mexico do not make anywhere close to that number! Their salaries could go up but companies will probably not look to bump their salaries up by 400%. This also means that forcefully more jobs will have to open in the United States. Otherwise, car companies would be paying Mexican workers what low-grade executives make in the country. That makes no sense. This deal is good for everyone working in the car industry in America.