To Outfox the Chicken Tax, Ford Strips Its Own Vans

SEPTEMBER 23, 2009
This Wall Street Journal article by Matthew Dolan is so funny because it is clever to see how ingenious people can get when it comes to saving money and making a profit. This article talks about the Ford Motor Company and how it can import vans from Turkey that contain seats for passengers to sit on and windows for them to look out of. What’s funny is, Ford does not intend them to be passenger vans but instead will strip them immediately on their arrival to the U.S. of their windows and seats and convert them to delivery vans. All this concocted by the Ford Company to prevent having to pay the 25% tariff that would be charged if they were to ship over fully completed delivery vans.

Normally you might find this not funny but rather sad and say that the Ford Company is defrauding the collector of the tariff and hurting American car companies, but what is so funny is it is perfectly legal, and really seems to hurt no one. Apparently this all started almost a half a century ago when Europe put high tariffs on imported chickens with increasing sales to West Germany. In response then, President Johnson taxed imported trucks and commercial vans. A little bit of history of which I was unaware. Apparently we had our own little trade war going on.

Ford gets a lot of flack from my family because they are Chevy diehards, so I find this article telling in the way foreign car companies handled this situation. Some companies
just built their own manufactures in the U.S. to avoid the tax, while Ford just works around it. Other U.S. car companies will import just trucks in disassembled parts and then assemble them once they reach the U.S. and avoid the tax. Ford goes the extra mile by recycling the steel and glass from the seats and windows they tear out. Now of course this does cost Ford a lot of money to convert the vans into delivery vans but it also saves money considerably as the article listed making the import tax seem more like 2.5% instead of 25%. Now Ford can sell these gas efficient vans to small business owners at a more reasonable price than if they had to pay the 25% tariff. It’s cool that even the star of the Food Network’s Ace of Cakes owns one. I liked the authors light hearted description of how Ford goes about tearing down the vans and converting them. He obviously does not see anything wrong with the scruples of the Ford motor company and I guess it seems alright with me when I read it because he compares the process of removing items as “Easily as he would pop the top off a soda bottle."

Now many might say this process is wasteful of resources, but the Ford Company I think is one car company that did not have to be bailed out in the recent Government money giveaway, but I say they have found solutions to problems and have continued to produce and sell vehicles where they see a market opportunity and if they can outsmart the “chicken tax” and not hurt the American economy, I say more power to them.