Ford Motor announces electric vehicle plan
is still relatively low — and just as importantly, stable — in most of America, spending $4.5 billion on electrification is a pretty gutsy business plan. The shift in the other direction, from fuel-efficient sedans to the thirstier tall wagons and trucks over the past few years (due to cheap gas) flies in the face of such a bold plan.
Then there’s the whole political football to consider. After coming under considerable criticism from President Donald Trump over its expansion plans in Mexico, Ford pulled an abrupt aboutface. On the same day it announced the electric vehicle rollout, it announced cancellation of a $1.6 billion plant in Mexico.
Instead, Ford will add 700 permanent new jobs in Michigan, where it will build a new Manufacturing Innovation Center at its Flat Rock Assembly Plant.
Forbes.com reported that Ford Chief Executive Mark Fields told reporters at the Flat Rock announcement that it was “a vote of confidence in (then) President-Elect Trump and some of the policies he may be pursuing. … We see a more positive U.S. business environment under Trump.”
On the other hand, the now-canceled Mexico plant is where Ford had planned to build the subcompact Ford Focus, which isn’t selling well.
“The reason that we are not building the new (Mexico) plant, the primary reason, is just demand has gone down for small cars,” Fields told the Detroit Free Press.
In an interview with CNN, Fields reiterated that slow demand and not promises from Trump was the reason the Mexico plant was spiked and jobs were added in the United States.
“First of all, we didn’t cut a deal with the president-elect,” Fields told CNN at the time. “We did what’s right for our business, first and foremost. That’s what drives us in every business decision that we make. But we look at a lot of factors … and one of the factors that we see, again, is this more positive U.S. environment for manufacturing and investment here.”
The move appears to be a victory for both Ford and for Trump, according to University of Michigan’s Ross School of Business professor Erik Gordon.
“It is the wrong time to build new plants in Mexico,” Gordon told Bloomberg. com in an email. Gordon said Ford will save money, “American jobs, and will avoid the risk of a border tax and a smack in the face from the new president.”
In the next 10 years or so, the public will know whether Ford’s direction was the right way to go, but for now it looks good on paper.