Ford cancels Mexico factory, will invest in Michigan expansion
WASHINGTON — Ford Motor Co. said Tuesday it was scrapping plans to build a $1.6 billion factory in Mexico and would invest $700 million to expand a Michigan plant to build hybrid, electric and autonomous vehicles that will add 700 jobs there in a move Ford’s chief executive said was a “vote of confidence” in the economic policies of President-elect Donald Trump.
The announcement also highlighted the importance of hybrid and electric vehicles to Ford, which revealed it would produce hybrid versions of its popular Mustang sports car and F-150 pickup truck by 2020.
Ford isn’t abandoning expanded production in Mexico. The company said that to “improve company profitability” it would build its next-generation Ford Focus at an existing plant in Hermosillo, Mexico.
But in the wake of criticism by Trump of the U.S. automaker and other companies moving manufacturing jobs across the border, Ford said it would cancel its plans for a major new plant in San Luis Potosi, Mexico.
A company news release didn’t mention Trump, but Chief Executive Mark Fields told CNBC on Tuesday that the new plans were “a vote of confidence” in the direction of the U.S. economy under the president-elect.
“One of the factors that we see is a more positive U.S. manufacturing business environment under President Trump,” Fields said. “This is a vote of confidence in what we think the president-elect is going to pursue, and it’s right for our business.”
The company spoke with Trump and Vice Presidentelect Mike Pence about the news earlier Tuesday.
A few hours before Ford’s announcement, Trump complained via Twitter that General Motors Co. was selling Chevrolet Cruze vehicles made in Mexico tax-free in the U.S.
“Make in U.S.A. or pay big border tax!” Trump tweeted.
GM responded that nearly all the Chevy Cruze vehicles sold in the U.S. are made here.
“All Chevrolet Cruze sedans sold in the U.S. are built in GM’s assembly plant in Lordstown, Ohio,” the company said. “GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S.”
Ford’s announcement was in the works well before Trump’s GM tweet, said Joe Hinrichs, president of Ford’s Americas group.
“Our commitment to U.S. has always been there. It’s our home. It’s our largest market,” Hinrichs said in an interview. “This reinforced that commitment we have to the U.S. economy and U.S. manufacturing.”
The company outlined detailed plans for seven of the 13 new hybrid or electric vehicles it plans to introduce in the next five years. The moves are part of a $4.5 billion investment in electric vehicles by 2020.
The $700 million expansion of Ford’s Flat Rock Assembly Plant in Flat Rock, Mich., over the next four years will enable the factory to make a new “small utility vehicle with extended battery range” as well as “fully autonomous” vehicles for ride-hailing services, Ford said. It said the plant will also make the Ford Mustang and Lincoln Continental.