Blog

Latest Industry News

Ford, following Trump criticism, cancels plans for $1.6 billion Mexico plant

  • Uncategorized
  • Comments Off on Ford, following Trump criticism, cancels plans for $1.6 billion Mexico plant

DETROIT — Ford Motor Co., following months of withering criticism from President-elect Donald Trump for expanding operations in Mexico, said today it will cancel its $1.6 billion assembly plant in the early stages of construction in Mexico, instead investing $700 million in the U.S. to bring to market seven of 13 electrified vehicles.

The plans, in part, include an F-150 hybrid, Mustang hybrid and a fully electric SUV with a 300-mile electric range.

Ford CEO Mark Fields called the reversal a “vote of confidence” in Trump and his pro-growth policies.

“We’ve made this decision independently on what’s right for Ford, but we look at all the factors,” Fields said. “Our view, we see a more positive U.S. manufacturing business environment under President-elect Trump and the pro-growth policies and proposals he’s talking about.”

Ford in December 2015 announced plans to invest $4.5 billion in electric car research and add 13 electrified vehicles to its lineup by 2020. Today it announced details about seven of the 13.

The new fully electric small SUV will be coming by 2020 and will be built south of Detroit in Flat Rock, Mich. It, alongside a high-volume autonomous hybrid and the hybrid versions of the Mustang, will be built in Flat Rock. A Transit Custom plug-in hybrid, available in 2019, will be built in Europe; and two new pursuit-rated hybrid police vehicles will be built in Chicago.

To support this, Ford plans to invest $700 million and add 700 direct new jobs in the U.S. over next four years. Part of that money will go to create a new Manufacturing Innovation Center in Flat Rock. Fields said the plant will become “one of the world’s most flexible and high-tech manufacturing centers.”

UAW-Ford Vice President Jimmy Settles said he cried tears of joy when he found out about the announcement, roughly a week ago. He called the investment “the equivalent of a new assembly plant.”

‘Pro-growth policies’

Fields said Ford was “encouraged” by “pro-growth policies” Trump and the new Republican Congress are likely to pursue, citing them as one of several factors in the company’s decision to invest in the U.S. and cancel the Mexico plant.

“We believe that these tax and regulatory reforms are critically important to boost U.S. competitiveness and of course drive a resurgence in American manufacturing and high-tech innovation,” Fields said.

Ford also said it is moving production of the Focus sedan — which was supposed to go to the new Mexican plant — to its existing Mexico plant in Hermosillo.

Fields cited changing market demands and slower sales of small cars as the decision to keep the Focus in Mexico.

Trump has threatened to slap Ford with a 35 percent tariff on any vehicles it imports from Mexico, as well as renegotiate or pull out of the North America Free Trade Agreement. This morning, Trump also targeted GM in a tweet, threatening to impose a “big border tax” for making its Chevy Cruze model in Mexico. In response, GM reiterated that Cruzes built there will mostly go to the domestic market and that it will continue to build the compact in the U.S.

Fields said he called Trump and Vice President-elect Mike Pence to tell them of the news this morning. A Ford spokeswoman said the call came after Trump’s tweet about GM, and the two were unrelated.

Ford’s electrified-vehicle announcement comes the same day Fiat Chrysler Automobiles plans to reveal an all-electric minivan concept, called the Chrysler Portal, that gets 250 miles of range. The automaker recently began selling a hybrid version of its Chrysler Pacifica minivan.

General Motors is also making headlines for its Bolt EV, which went on sale in California last month and boasts 238 miles of range. It comes out a year before the planned release of Tesla’s much-hyped Model 3, the California automaker’s own 200-plus range EV.

Fields in May confirmed Ford was developing an electric vehicle with range comparable to the Bolt, Model 3 and next-generation Nissan Leaf.

Ford said it is testing a fleet of 20 Transit Connect hybrid taxi and van prototypes.

New EV plans

A Mexico government spokesman said there was no official comment immediately after the Ford announcement, but there could be a statement later in the day.

Fields said he informed officials in Mexico to cancel the plant.

“Obviously, there was some disappointment,” Fields said. “But we’ve been in Mexico over 90 years, and we’re moving our Focus down to Hermosillo, so we’ll be safeguarding the 2,900 jobs that are there, plus we’ll probably add about 200 jobs when we add Focus there.”

Asked whether the automaker intended to offer an EV with a 200-mile range, Fields said Ford wants to be “among the leaders or in a leadership position” as more automakers introduce long-range battery-powered cars.

He said: “Clearly that’s something we’re developing for.”

Article Credit to Michael Martinez January 3, 2017 @ 11:17 am

Back to top