Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please help, thanks! In 2020 the US, Menico and Canada entered into a cew USMCA agreement which replaced the previous North Amerios Free Trade Agreenent
please help, thanks!
In 2020 the US, Menico and Canada entered into a cew USMCA agreement which replaced the previous North Amerios Free Trade Agreenent (NAFTA). in the agreemant fare is a Labor provision that ultimately requires at least 4045% of an automobilo s cortem be producid using labor that is paid at a rast of a minirtum of 516hr. You are the CEO of a major automotve manulacturer that exports 10K of its production wondwide. Whilo saies have been heanty oner the past 5 years you afe being facod with a decire in salas to Cling dae to Crinese tarills currenty placed on US automotive imeots which have avecaged 25%. Addiknally, rocent trade nogsbalene between the US and China indicate mat these tarills could nerease to potentialy 50% of the vehicie import price. Your VP of Global Sales is now forecasting a 7ot decline in sales to China and your Finarice team exptcts ths to fesult in. significant decine in both revenue and prolit Your Doatd of Direetors and shaveholders aro lookhg to you for preft improvemert and ineresised sharobolder vatue. You have been. approached by the Mexican govemment to epen a fachery in Juarez fust across the bordse from El Pasa. Texas) and the Mexican gonernment wili subsidize fhe tacilfy esnstwcton t. compary spproximately $10 milion annualy in labor costs which could be used thep orsed tarit increnses in China and/oc could go drecty s the ocenpany's botton line preft. On the other hand, the US govemment is pushing your compony b eapard is Us production to seovre high paying US jobs tor the lacal economy: On top of tis, you are boking ta expand your giotal sales presence into third world regione wach as Centrat Atrina. South East Acia, Central Ameries, ve Miodie East and other regions with hige markit petential due the shear site of the populetions and the expecied increates in pec cipha spendkg fower. Vau Giobal Salet and Marketry tesms have astised tha Chinese aubinoble manutacturess ave aso targeting these same rogions. Ths same team alio advises that the market potential in thobe regons could axpend gibtal sales by sos, and prefits by 15 sis onor: the next 6 years. Wing the rescurces below, and other resoutees you may find, and keeging in mind that it is the fiduciay resporsitality of at lesders of for-groit cerponabons io inacimure shareholder value. Post your decision to open af not to open, a tuciicy in Mexice. Explan, in detal, your remionng Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started