CNNs Dobbs Blames Free Trade, Non-Union Labor for Fords Woes

     CNNs Lou Dobbs outsourced his error-prone anti-free market services to a competing network with a January 23 guest appearance on ABCs Good Morning America to discuss Ford Motor Companys (NYSE: F) layoffs. The business anchor assigned some fault to the high cost of unionized labor and to poor management at the nations No. 2 automaker, but mostly laid the blame at the feet of free-trade policies which permitted foreign car makers to locate in right-to-work states where the atmosphere is anti-union.

     Dobbs should have done his homework the night before: Toyota (NYSE: TM) and Honda (NYSE: HMC) have extensive manufacturing operations in non-right-to-work states, with Toyota planning to add more jobs at existing facilities in those states.

     On January 17, Toyota issued a press release reporting that 1,558,828 vehicles and 1,295,227 engines were produced in 2005 at its North American plants, adding that Both figures represent new record production levels for Toyota, which began North American production in 1985.

     Of Toyotas North American manufacturing, roughly 79 percent of vehicles and 70 percent of engines were assembled in non-right-work states such as California, Indiana, Kentucky and West Virginia. The rest of the vehicles were assembled in Canada or Mexico. Toyotas plant in Alabama, a right-to-work state, produces just 13 percent of Toyotas engines. American Honda Motor Company maintains engine and vehicle assembly plants in Ohio and emissions testing facilities in Michigan and Colorado. All three of those states are non-right-to-work states, according to the National Right to Work Foundation, which defines a right-to-work law as one that secures the right of employees to decide for themselves whether or not to join or financially support a union.

     According to the January 17 release, Toyota is expanding operations at plants in both union and non-union states in 2006, adding 150 new jobs in West Virginia for transmission gear production and a total of 800 workers for an expanded engine plant in Alabama.

     While also bemoaning free trade at any cost, Dobbs repeated his worries about the Chinese auto company Geely, which is slated to sell cars in the United States within the next several years. But as the Associated Press reported on January 16, Ford Motor Co. brand sales in China rose 46 percent last year to 82,225 vehicles. That growth beat the local car industry, whose sales expanded about 14 percent last year, the AP noted, citing the China Association of Automobile Manufacturers.

     American car buyers dissatisfied with Fords product line are not all that likely to purchase a Chinese vehicle that its own countrymen find substandard. The Business & Media Institute previously documented why Dobbss worries are overblown.