The economy of a nation sustains the country itself. By extension, it also affects the economic activities of the country surrounding it (Brenner 2003). A country maybe developed, developing or a third world economy. It takes some factors clustered together to be able to achieve that. Manufacturing and production are essential elements that sustain a country’s economy. It makes important corporation entities to a country attaining a clean bill of health by acceptable universal standards. Moreover, this paper is will look at Ford’s impact on the Mexican economy by evaluating how the corporation contributes directly to the country’s economy.
Ford is the leading automobile company in the United States of America. It has its humble beginning under the watchful eyes of its proprietor Henry Ford. His idea of roads crisscrossing the country fueled his ambition to venture into automobile. According to Ford (2009), he holds the notion that creation of Ford acted as a gateway of other emerging sectors such as the need for the rubber to make tires as well as glass for windshield and side mirrors. The invention of the automobile changed the landscape of the American economy and as well as the Mexican economy. First, it led to the creation of more job opportunities by having a production plant being started in the countries’ capital. Furthermore, it encourages the taxation of more workers in the country; thus, resulting to availability of more revenue for collection by the government agencies in charge of taxation (Briffault 2010). In the light of such revelation, Stiglitz and Rosengard (2015) look at how the glass and rubber affect the Mexican economy, as a result of being critical components that ensure an automobile is safe for use in such a country.
Rubber is used to make tire for vehicles. Firestone is an example of a leading tire manufacturer in the world. The implication is that the company produces a lot of revenue for itself as well as the government, which it submits via taxes. According to Brautigam, Fjeldstad and Moore (2008), revenue collected by the government on taxing corporations is huge, and potentially influences the economy positively. Besides, as production of more cars increases in Mexico, so does, the size of the task a comparative analysis of the trends in the figure suggests that since the inception of Ford industries, the Mexican economy is showing rapid growth signs. The impact is significant ,if Ford closed its new plant in the country or went bankrupt, its ramification will affect not only the country’s economy, but the entire global economy as well.
Additionally, glass is to fashion windscreens and side mirrors. The relationship between production of cars and the need for the windshield can be termed as directly proportional. Since the inception Ford motors plant, the number of units sold has been on the rise in the country. As such, the tax that the company pays to the government is also massive. According to Brautigam, Fjeldstad and Moore (2008), it means that the government has grown by the same proportion as any business that has invested in the production of glass related products. The graph shown below tries to establish the noted statistics through the graph below.
Marketrealist.com. (2016)
Ford industry also created the need for fuel, to power up the vehicles. Mexico has 90%of its vehicle operate on fuel. According to Walton and Rockoff (2013), the demand for fuel by the fraction of the economy, which owns automobiles, is huge. The government benefits by the fuel levies it receives as taxes. In addition, the more cars are being manufactured, the more the demand for fuel as well as the growth of the economy, which creates room for employment of more people, as shown below.
Fuel is also used to run many types of machinery that have close associations with either rubber or glass. Thus, by conventional standards, it can be said that Ford Company has directly contributed to the Mexican economy. The revenue the government collects in every enterprises in either manufacturing or production industries, has sustained the Mexican nationals and economy through tough times as well as good times.
Reference list
Brautigam, D., Fjeldstad, O.H. and Moore, M. eds., 2008. Taxation and state-building in developing countries: Capacity and consent. Cambridge University Press.
Brenner, R., 2003. The boom and the bubble: The US in the world economy. Verso.
Briffault, R., 2010. The most popular tool: Tax increment financing and the political economy of local government. The University of Chicago Law Review, pp.65-95.
Ford, M., 2009. The lights in the tunnel: Automation, accelerating technology and the economy of the future. Acculant Publishing.
Marketrealist, 2014. Recommendation: Break down automobile sales by geography - Market Realist. [Online] Available at: http://marketrealist.com/2014/04/recommendation-break-automobile-sales-geography/ [Accessed 1 Apr. 2016] Fishman, C., 2006.
Stiglitz, J.E. and Rosengard, J.K., 2015. Economics of the Public Sector: Fourth International Student Edition. WW Norton & Company.
The Wal-Mart Effect: How the World's Most Powerful Company Really Works--and HowIt's Transforming the American Economy. Penguin.
Walton, G. and Rockoff, H., 2013. History of the American economy. Cengage Learning.
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