Ford to refund manufacturers for aborted Mexican factory
Before Ford Motor abruptly cancelled a factory in Mexico criticised by US president-elect Donald Trump, the foundation was poured, some of the beams were up and parts makers were preparing to supply the plant.
The vehicle maker is now working on a plan to compensate those manufacturers and return the land to its owner, the government of Mexico, said Joe Hinrichs, Ford’s president of the Americas. The company would eventually disclose the construction cost of the aborted project, he said.
“It’s not an easy decision to cancel a plant you’ve already started,” Hinrichs said after a speech at Automotive News World Congress in Detroit. “We don’t take it lightly. It was a big decision to build the plant in the first place and it was a big decision to cancel it.”
Ford told Mexico’s government of its plans to scrap the $1.6bn small-car factory on the morning of January 3, just before making the decision public.
The Dearborn, Michiganbased company now plans to build Focus compacts at its existing plant in Hermosillo, Mexico. Executives made the decision when they saw the latest sales projections for the car were lower than anticipated, Hinrichs said.
MAKING PEACE
“We stayed true to our commitment to the Focus programme to make it in Mexico,” he said.
Ford has been attempting to make peace with Trump after the president-elect made the company a frequent target of criticism on the campaign trail.
After Ford announced it was cancelling the factory and adding 700 jobs to a Michigan plant, Trump tweeted his praise and turned his ire towards General Motors and Toyota for building cars in Mexico.
“Ford just announced that they stopped plans for a $1bn plant in Mexico and they’re going to be moving into Michigan and expanding, very substantially, an existing plant,” Trump said on Wednesday during his first news conference since the election. “I appreciate that from Ford. I hope that General Motors will be following, and I think they will be.”
General Motors spokesman Tony Cervone declined to discuss the company’s manufacturing investment plans.
Ford has said it is saving $500m by moving Focus production to its existing Mexican plant from the now-abandoned site in San Luis Potosi.
The cost to compensate suppliers would not be “too dramatic”, Hinrichs said.