For years, the Detroit Three have moved production out of their U.S plants to avoid the high cost of union labor. In October 2011, Ford Motor Co. signed a tentative labor contract with the United Auto Workers (UAW) union that partly reverses that trend. The new four-year contract includes adding 12,000 hourly jobs at its U.S facilities over the next four years as a result of relocation of production from Mexico, Japan and China back to America.

The move by Ford has earned itself praises from no less than the US President himself, Barack Obama. Mr Obama sited Ford as an example of companies that are bringing jobs back to the US and contributing to the growth of its economy. At the same time, he also credited the effort to the UAW for making the deal possible. In the next few weeks, the President plans to introduce new tax proposals to reward companies that are investing in the US and cut tax breaks for companies that are moving their operations out of the US.

An underutilized factory in Flat Rock, Michigan will help build the next generation Fusion mid-sized car that to date has been produced only in Mexico. Another Ford plant in Kentucky will assemble commercial vans that the company now builds in Turkey. All of the new hires are expected to earn slightly more than half of what the veteran auto workers get. This is to ensure that the US is cost competitive against its foreign rivals.