Automaker to invest $1.2B in Michigan plants
Automaker announces $1.2 billion investment in three Michigan facilities
Windsor’s auto parts and its tool, die and mould sectors stand to profit from Ford Motor Company’s announcement Tuesday that it’s pouring US$1.2 billion into three of its Michigan facilities.
“They could benefit ... it’s got the potential of helping,” Dennis Desrosiers, of DesRosiers Automotive Consultants, said of the Ford spending.
While it’s “a lot of money,” DesRosiers pointed out that much of Tuesday’s announcement had already been previously pledged or made public. And in the bigger picture, the previously unannounced portion of US$350 million in new investments is a small piece of the annual total spent in the automotive sector, he said.
Tuesday, said DesRosiers, was all about American politics and spin.
Ford made sure the White House got an early-morning heads-up, with President Donald Trump quickly taking to twitter ahead of the company’s actual announcement: “Big announcement by Ford today. Major investment to be made in three Michigan plants. Car companies coming back to U.S. JOBS! JOBS! JOBS!”
“The auto sector is playing Trump,” said DesRosiers. “He wants jobs and investments, and the industry will give him what he wants — but they want some very big items in return.”
The biggest, perhaps, are strict environmental and vehicle mileage targets the previous Obama administration had set for the automotive sector — standards Trump has already targeted. The billions of dollars in new U.S. investments recently announced by automakers pales in comparison to the multiple billions those companies stand to save as a result of easing those environmental requirements, said DesRosiers.
The “downside threat,” said DesRosiers, is that Canada might lose out on some of the new investments that “the auto sector will throw at Trump.”
The investments Ford announced Tuesday include:
US$850 million to retool Michigan Assembly Plant to support the return of the Ranger (end of 2018) and Bronco (in 2020);
US$150 million to expand components capacity at Romeo Engine, bringing with it 130 new jobs;
US$200 million for an advanced data centre to support Ford’s expansion to an auto and mobility company.
These new investments are in addition to CEO Mark Field’s announcement in January of a US$700-million upgrade (and 700 new jobs) at the Flat Rock facility for high-tech electrified and autonomous vehicles.
“As America’s top producer of automobiles, we are proud to be going even further in our commitment to invest in manufacturing here at home,” Joe Hinrichs, Ford’s president for The Americas, said in a company announcement.
Ford said it has spent more than US$3.8 billion to develop more than 30 engines since 2009, when the company introduced its first EcoBoost engine. As part of a $600-million Windsor commitment to Unifor in the most recent round of contract talks, Ford of Canada is expected to announce later this year which new product is coming to its local engine plants.
Going forward on Trump’s America First agenda — including corporate tax cuts and other tax reforms at home and possibly new border tariffs for imports — DesRosiers said new U.S. automotive investment will likely continue flowing south, but to the southern U.S. states rather than Mexico.
Last year saw vehicle production gains among all three NAFTA members, with a record total of 18,165,870 units manufactured. Canada’s 13-per-cent share (2,370,271 vehicles) was down from its peak year of 1999 (17.4 per cent), while Mexico’s share more than doubled between those same two years (from 8.7 per cent to 19.8 per cent, or 3,597,462 units, in 2016).