Ford to build US$2.5 bil. en­gine and trans­mis­sion plants down in Mex­ico


The Ford Mo­tor Com­pany un­veiled Fri­day a US$2.5 bil­lion in­vest­ment for en­gine and trans­mis­sion plants in Mex­ico, the sec­ond ma­jor project an­nounced in the coun­try by a for­eign auto power this week.

The U.S. firm’s plan to ex­pand an en­gine plant in the north­ern bor­der state of Chi­huahua and build a trans­mis­sions fac­tory in the cen­tral state of Gua­na­ju­ato will cre­ate 3,800 jobs, the com­pany said.

The in­vest­ment was an­nounced by Ford’s pres­i­dent for the Amer­i­cas re­gion, Joseph Hinrichs, and Pres­i­dent Enrique Pena Ni­eto at the Mex­i­can leader’s of­fi­cial res­i­dence in Mex­ico City.

Just two days ear­lier, Pena Ni­eto had in­vited Toy­ota ex­ec­u­tives to his res­i­dence for the Ja­panese auto gi­ant’s an­nounce­ment that it was end­ing a new plant freeze with a US$1 bil­lion fac­tory in Gua­na­ju­ato to pro­duce the Corolla sedan.

The back-to-back an­nounce­ments “prove to the world that Mex­ico has con­di­tions for com­pet­i­tive­ness, con­di­tions to be more pro­duc­tive and con­di­tions to at­tract more in­vest­ments,” Pena Ni­eto said.

“This makes the world turn to look at Mex­ico,” he said.

Mex­i­cans of­fi­cials said the new in­vest­ments will boost the coun­try’s goal of be­com­ing a top five auto pro­ducer in the world by 2020, pro­duc­ing 5 mil­lion ve­hi­cles per year.

The auto in­dus­try’s grow­ing suc­cess brought the gov­ern­ment much-needed good news as fall­ing oil prices have led to bud­get cuts and a re­duc­tion of eco­nomic fore­casts for 2015, from 3.0-4.0 per­cent growth to 2.5-3.5 per­cent.

‘A per­fect week’

The coun­try’s prox­im­ity to the world’s big­gest mar­ket, the United States, its rel­a­tively cheap and skilled la­bor, and its free trade agree­ments with sev­eral na­tions make it an at­trac­tive des­ti­na­tion for in­vestors.

Mex­ico over­took Brazil last year to be­come the top auto pro­ducer in Latin Amer­i­cans and the sev­enth big­gest in the world. It is the sixth pro­ducer of auto parts in the world.

Mex­ico pro­duced more than 3.3 mil­lion ve­hi­cles last year, some 500,000 fewer than num­ber six power In­dia.

It also sur­passed Ja­pan as the top ex­porter of ve­hi­cles to the United States in 2014, and an­a­lysts say it is closing in on first­placed Canada.

Econ­omy Min­is­ter Ilde­fonso Gua­jardo said that, since Pena Ni­eto took of­fice in De­cem­ber 2012, the gov­ern­ment has an­nounced 22.6 bil­lion dol­lars in auto sec­tor in­vest­ments.

“It has been a per­fect week for the Mex­i­can au­to­mo­bile in­dus­try,” Gua­jardo said.

Ford said the new US$1.1 bil­lion gaso­line- pow­ered en­gine fa­cil­ity will be built within Ford’s plant in the north­ern bor­der state of Chi­huahua to boost en­gine ex­ports to the United States, Canada, South Amer­ica and the Asi­aPa­cific re­gion.

The com­pany will also spend US$200 mil­lion to ex­pand the Chi­huahua plant’s pro­duc­tion of I-4 and diesel en­gines, he said, turn­ing the fa­cil­ity into the big­gest en­gine plant in Mex­ico.

The new US$1.2 bil­lion trans­mis­sion plant will be built on the premises of Ford sup­plier Ge­trag in the city of Ira­pu­ato, Gua­na­ju­ato.

Ford said its first trans­mis­sion fa­cil­ity in Mex­ico will pro­duce “two all-new au­to­matic trans­mis­sions for key prod­ucts pri­mar­ily in South Amer­ica, Europe and Asia Pa­cific as well as other North Amer­i­can mar­kets.”

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