Mexico Panics As Trump's Leverage "Far Greater Than What Mexican Elites Thought"

Tyler Durden's picture

Earlier this morning we noted that the Mexican Peso was plunging once again - very close to all-time record lows - as fears spread that Ford's decision yesterday to cancel a $1.6 billion plant may become the norm following president-elect Trump's tweet that "this is just the beginning."

 

And here is the peso:

 

And while many senior politicians within the Mexican government dismissed Trump's campaign speeches as empty rhetoric, per the Associated Press, Ford's cancellation of it's $1.6 billion auto plant has served as a "much needed wake-up call" that shows that Trump has far greater leverage "than what Mexican elites thought until recently."

"Trump leaves Mexico without 3,600 jobs," read the headline on El Universal. "Ford's braking jolts the peso," said Reforma, referring to the Mexican currency's nearly 1 percent slump following the news.

 

Two weeks before inauguration, the scuttling of the planned Ford factory and Trump's pressure on General Motors should be a "much-needed wake-up call," said Mexico analyst Alejandro Hope.

 

It shows "how much actual leverage Trump has within specific companies, which is far greater than what Mexican elites thought until recently," Hope said. "They claimed that at the end of the day economic interests would prevail over political messaging. That's clearly not the case."

All of which has caused some level of panic within the Mexican political and media spheres from the elites who are slowly realizing that when Trump says he wants to disrupt the status quo by renegotiating NAFTA and building a border wall, "he means it"....as completely shocking as it may be that a politcian might actually mean what he says. 

In an editorial, El Universal also recalled the deal Trump struck in December with Carrier to keep 800 of 1,300 jobs at an Indiana furnace factory from being sent to Mexico, in return for millions of dollars in tax incentives. It also implicitly criticized the Mexican government's response to the incoming administration.

 

"Mexico loses thousands of jobs with no word on a clear strategy for confronting the next U.S. government which has presented itself as protectionist and, especially, anti-Mexican," the paper wrote. "Trump will try to recover as many U.S. companies that have set up in Mexico as possible. He will try to make them return at whatever cost, through threats or using public resources."

 

"Ford's decision is indicative of what awaits the economies of both countries," the daily La Jornada said. "For ours a severe decrease in investment from our neighboring country, and for the U.S. a notable increase in their production costs."

 

Hope said more decisions like Ford's are likely to come. And while the loss of a single planned plant probably does not fundamentally change the U.S.-Mexico economic relationship, "it certainly shows that the idea that the status quo was entrenched was false."

 

"This should put us on notice that when he says that he wants to renegotiate NAFTA, he means it," Hope said.

As we pointed out a few days ago, with Trump scoring new victories with every passing day, the question no longer seems to be whether or not Vicente Fox will pay for the "f**king wall," but rather, how he'll pay for it...cash or credit, Mr. Fox?

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ebworthen's picture

Build that wall!

Miffed Microbiologist's picture

Next, cut illegals benefits and let them deport themselves.

Miffed

tazs's picture

I guess you and your kids will go pick the tomatoes and the cucumbers, and will be dishwashers in restaurants for minimum wage. Good luck.

https://biblicisminstitute.wordpress.com/views-of-news/#trumpmeans

SoDamnMad's picture

No, we got Obama's Muslims for dat.

Miffed Microbiologist's picture

When I was a kid I worked on my grandfather's hop ranch in the kilns. In the summer I worked on my boyfriends dairy farm milking cows, cleaning calf pens and helping in the hay harvest. During school I worked part time at Arby's.

All of these jobs were difficult but I wanted to go to college and my only choice was to work, my parents had no money to send me. The fringe benefit was it taught me responsibility and gratitude. It grew me up fast. While my fellow freshmen were partying and puking out the dorm windows, I was either working or studying. At the time I felt somewhat sorry for myself but looking at such spoiled narcissistic young people today, I realize now I was very fortunate. They have no resilience.

Maybe picking a few tomatoes would be a good thing for them.

Miffed

QEsucks's picture

Wow Miffed, complete respect. No, I'm not being sarcastic just respectful.

I fear the kids don't have that spine anymore glued to their iPhones.

Midas's picture

The biggest problem with Miffed is that she is one-of-a-kind. 

CRANKY YANKEE's picture

Not one of kind but one of a different generation.  I worked through school, my wife did as well (much tuffer for her).  My 2 oldest kids in college have multiple jobs in summer adding up to over full time hours, and have part time jobs while in school.  My highschooler has a part time job for her spending money.  While we do help our college kids more than my parents helped me, they MUST earn their spending cash and gas money and car insurance money and cell phones..and...and...

Most of their friends have it handed to them and it is very clear who will be having a better future when all of them have to pay their own way.

Badgurl_KT's picture

The parents are the ones buying the phones and paying the monthly bills. Don't blame the kids

crackheadwilly's picture

allright i get you, and i do put my college kid to work during the "pause" over the holidays (she cleans shitters as a campus job so i lay off her usually). HOWEVER, in this tech saturated world I simply have no choice but to keep my kids at the cusp of tech; Imagine this: a computer science student without a computer. yup, that was me. 

The good jobs are gone people, if you have kids you better help them stay on top of sheit or they will gladly spend their lives in your house. doesn't mean i will buy them cars, vacas, or anything extraneous... just that their trade tools will be Snap-On grade, not harbor freight grade. under normal conditions the same, but when it counts, one fails the other doesn't. I make sure the kids' Cell phones and laptop better be great, their workspace usable, and noise level acceptable all across the house.

Giant Meteor's picture

Great story. I did some haying as a young man. Them old boys were tough as nails. Now mind you I was no small dude, but the ole boy that run the place would be up up up wayyy at the top of the mow in the barn, throwing them bails at us young'uns two at a time off the elevator, to finish the stack in a quite large barn.

Hot, very hot, dusty, damned hard strenuous work. I remember going off on a toot one night with the fellas and reporting back to the barn the next day, early am, hungover as all hell. One of my pals pointed out the ole boys Red Injun chew right over there, to be taken on a bet. Well never havin had a chaw before, I made that fatal rookie mistake, and swallowed a bit of the ole chaw juice. Farmer Dick shows up and says, "Giant Meteor" you're lookin a bit pekid today, right before I puked on his shoes ..

Alas, just the mere beginnings of the many beatings to come, self imposed of course!

Thanks, you reminded me.

HRH Feant's picture

Same here, Miffed. I grew up working on local farms. Picked strawberries when I was 12 years old. $1 a flat. Was hired by a a YMCA ranch where poor city kids were sent to have fun. I cleared trails, dug fence post holes, tacked up the horses. 4.5 miles on my 3-speed bike each way to the job. 9 miles per day. It wasn't flat either. Super hilly area.

When I went into boot camp at 17 I was strong and super healthy. It was easy. I was surprised because I thought the drill instructors might beat me. They did not. They were an inspiration to me then, and now. Boot camp was easy compared to my real life as a "teenager."

My parents didn't allow me to indulge in negative thinking and they never, ever allowed being poor to be an excuse. Ever. It wasn't an excuse for being dirty or for bad behavior or for poor grammar. Thank god my parents were tough as nails and taught me how to be a rugged individualist. No excuses. That was their core teaching. Buck up, own it, be responsible.

4 wheel drift's picture

you STILL don't get it stupid moron.....

Trump is not getting rid of the LEGAL migrant workers....

 

it is the ILLEGAL SCUM he is addressing along with the fucking kommies

who want the ILLEGAL VOTES  from the FREE SHIT ARMY coming from Mexico....

oh and btw....  GETTING AMERICAN JOBS BACK

stupid iliterate fuck....   now,  go pik up some strawberries idiot

 

 

bh2's picture

"I guess you and your kids will go pick the tomatoes and the cucumbers, and will be dishwashers in restaurants for minimum wage. Good luck."

Kids in my generation did just that. I did. My wife did.

We were never led to believe any kind of useful work was undignified.

 

HRH Feant's picture

Same here. I was raised to respect people. No matter what kind of job they performed. Work, of any kind, was to be respected. Period. I would have got the belt if I had made fun of anyone because they worked.

migra's picture

No. We will have the ghetto do that work when we cut off their welfare.

flaunt's picture

No we're going to round up all the asshole liberals and make them pick the tomatoes and cucumbers, and wash dishes.  Why not make good use of them?

z80kid's picture

"I guess you and your kids will go ... for minimum wage."

 

Economics much?

No job that has a shortage of workers pays minimum wage. In a functional economy you would have to pay people more money to get them to do unpleasant work. The only reason miserable jobs have miserable pay is because there is an excess of desperately poor people willing to do them.

Winston Smith 2009's picture

"I guess you and your kids will go pick the tomatoes and the cucumbers, and will be dishwashers in restaurants for minimum wage. Good luck."

Yes, we need get the snowflakes off of their pampered butts, away from their iToys, and away from garnering huge student loan debts as "professional students" earning useless degrees while biding time waiting for that "great job" (minimum work, maximum pay) which will never come. When I was in high school in the midwest in the late 60s, we had summer jobs in hot, humid, often muddy fields, so muddy they'd pull your shoes off if you didn't wear rubber boots, pulling corn tassels from the huge fields of corn breeders and I didn't see a single Hispanic anywhere.

xythras's picture

who cares about those mexican cockroaches

Koba the Dread's picture

Who cares about a cockroach who calls himself xythras?

Sofa King Confused's picture

Mexico should start building there own vehicles and make their own jobs.  Problem solved.

King Tut's picture

Why do we need to have Mexicans build shitty American-badged cars and trucks when US citizens can build those same shitty cars right here?

spdrdr's picture

Tut, just think robotics.  It's coming down the pike faster than any of us realise.

Once the robots control the factories, the shitty home-grown American-badged cars will be built to precision standards.

This does not take into account:

(1)  The purchasing "plateau" recently projected by a Ford exec; or

(2)  The fact that a modern. precision built vehicle will last possibly a generation without major repairs.

American cars are going to be great again (with the possible exception of Jeep. but that's another story), as long as the saboteurs in the factories are furloughed.

 

 

 

crackheadwilly's picture

post the link on that - I don't have a Bloomberg terminal handy

HockeyFool's picture

I thought Jeep was owned by Fiat now?

King Tut's picture

Jeep vehicles will fall apart @ 50K miles

A Man of Wealth and Taste's picture

A job program for Italian Americans as jeep mechanics (electricians)!

Pandrasus's picture

But who is going to be earning the kind of income required to purchase a vehicle like that?

CheapBastard's picture
The world, like the American snowflakes and left wing demobrats underestimate both The Donald and how many Americans actualy support The Donald. They are in for a surpise. There terrorists can eoither work with Trump and The Deplorables to build up America, or work against Trump to continue thier vapid quest to destroy it.
SirBarksAlot's picture

Force Mexico to raise the minimum wage from $0.60 per hour to $3.00 per hour and nobody would come back.

At the car factories in Mexico, I heard that Ford wants to pay the workers $20 per hour, but they have to go through a contractor who only pays them $3 an hour and keeps the rest.

Koba the Dread's picture

You heard? You heard! Is that what you heard? Other assholes "heard" that Vladimir Putin rigged the US elections. Still other assholes "heard" that Russia hacked New England's power grid. They's a whole lot of hearding going on these days.

If you "heard" what you heard, did you bother to research it and find out if what you "heard" was true or just some bullshit that some lying crunt told to an asshole so he would post it on ZH?

Fake news vs. truth! Which side of that divide do you stand on?

Oh, never mind. I already know the answer to that question.

Beowulf55's picture

I talked to one of those "contractors" in Saltillio Mexico recently in a high end resturant around the middle of December of 2016.  $3.00 is the high end.

He thought it was justified as he was able to hire only the"best workers" for the Honda plant.  He was doing them a service.

He was a social climbing arrogant fuck.  You think graft and corruption is bad here, check out Mexico sometime.  The regular folk are decent and hard working but the government parasites are an institution.

fattail's picture

Find the people employing the illegals and fine them for breaking the law.  If they have not paid the appropriate amount of taxes throw their asses in jail and seize their assets.  I have to obey all of the laws why don't they.  You do that a couple times and the illegals will deport themselves.

No wall needed.

TheRideNeverEnds's picture

I've got a batter idea, drive all the Mexicans et al to South America, kill those that resist and enslave the pretty women. Claim the land as our own down to Columbia and then build the factories in the desert.

It will be easier to build a wall on the border of Columbia and net net I think we could do it for about the same price if we use biological weapons, who's gonna stop us?

Koba the Dread's picture

I would stop you or die trying.

deer_flasher's picture

And how will americans get their so loved drugs? just asking

Giant Meteor's picture

Why I love coming back and looking at missed comments  -- another gem.

upvote

SillySalesmanQuestion's picture

Underestimate the Don at your own peril.
Reference MSM for pointers.

abyssinian's picture

Soon they will have to throw avocado and limes over the Trump wall! 

LetThemEatRand's picture

Anyone else wonder why a "$1.6 billion" auto plant only involves "3,600 jobs"?  Math is not my strong suit, but this seems a little odd.

Dr. Engali's picture

Look up the Camacari plant in Brazil and then you'll understand why.

https://youtu.be/J1OkZ3xowKQ

LetThemEatRand's picture

Ah, that explains it.  Robots (human and mechanical).

Giant Meteor's picture

Good bit of overhead there. Good video, and bookmarked. Thanks

Koba the Dread's picture

Perhaps if you'd work on your math skills--a lot--and learn something about capital asset deployment, you wouldn't need to ask such obviously inane questions.

cry-me-a-libaturd's picture

Fox, u have been out of corporate too long. u have lost your edge. simply talking tough aint enough, amigo!

WTFUD's picture

'It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt'

Mark Twain