In stark contrast to Ford’s cancellation of its proposed Mexican manufacturing plant,
Professor Christian Stadler said: "BMW is right to carry on with its plans in Mexico and there are four good reasons why. First, although Trump has sounded very aggressive in his statements, especially on Twitter, we still do not know if this will translate into policy. When you look at the Ford decision, that really fitted in with its wider agenda, it was more efficient to extend production in the US.
"Plus, once Trump looks at the details of the car industry, he will see that 40 per cent of the components of cars manufactured in Mexico are imported from the US, so imposing tariffs on car imports would also hurt the US economy.
"Thirdly, if Trump does become aggressive on trade he has to expect a reaction. For instance BMW manufactures its SUVs in the US, and its biggest market for that car is China, which may counter any tariffs on its exports with tariffs of its own.
"Finally, economically Mexico is just too good to give up on for car manufacturing. It has free trade agreements with 40 countries globally, so even if there is a downturn in the US there are plenty of other markets car companies can facilitate with production in Mexico.
"On average the cost of a worker in Mexico is $8 per hour, while in the US it is $60, so production is so much cheaper in Mexico manufacturers will think twice about moving production from there even if Trump does take action.
"Trump is going to get headlines with his statements, but it might not turn into a policy that will work."
How innovation is transforming government
According to Washington Technology’s Top 100 list, Leidos is the largest IT provider to the government. But as Lieutenant General William J. Bender explains, “that barely scratches the surface” of the company’s portfolio and drive for innovation.
Bender, who spent three and a half decades in the military, including a stint as the U.S. Air Force’s Chief Information Officer (CIO), has seen action in the field and in technology during that time, and it runs in the family. Bender’s son is an F-16 instructor pilot. So it stands to reason Bender Senior intends to ensure a thriving technological base for the U.S. Air Force. “What we’re really doing here is transforming the federal government from the industrial age into the information age and doing it hand-in-hand with industry,” he says.
The significant changes that have taken place in the wider technology world are precisely the capabilities Leidos is trying to pilot the U.S. Air Force through. It boils down to developing cyberspace as a new domain of battle, globally connected and constantly challenged by the threat of cybersecurity attacks.
“We recognize the importance of the U.S. Air Force’s missions,” says Bender, “and making sure they achieve those missions. We sit side-by-side with the air combat command, intelligence surveillance, and reconnaissance infrastructure across the Air Force. There are multiple large programs where the Air Force is partnering with Leidos to ensure their mission is successfully accomplished 24/7/365. In this company, we’re all in on making sure there’s no drop in capability.”
That partnership relies on a shared understanding of delivering successful national security outcomes, really understanding the mission at hand, and Leidos’ long-standing relationship of over 50 years with the federal government.
To look at where technology is going, Bender thinks it is important to look back at the last 10 to 15 years. “What we’ve seen is a complete shift in how technology gets developed,” he says. “It used to be that the government invested aggressively in research and development, and some of those technologies, once they were launched in a military context, would find their way into the commercial space. That has shifted almost a hundred percent now, where the bulk of the research and development dollars and the development of tech-explicit technologies takes place in the commercial sector.”
“There’s a long-standing desire to adopt commercial technology into defense applications, but it’s had a hard time crossing the ‘valley of death’ [government slang for commercial technologies and partnerships that fail to effectively transition into government missions]. Increasingly we’re able to do that. We need to look at open architectures and open systems for a true plug-and-play capability. Instead of buying it now and trying to guess what it’s going to be used for 12 years from now, it should be evolving iteratively.”