Ford axes Mexico plant as Trump targets GM
WASHINGTON: Ford scuttled a plan to build a new factory in Mexico yesterday following criticism from Donald Trump, and just hours after the president-elect attacked General Motors for importing Mexican-made cars into the US. Following months of criticism from Trump for its investments in Mexico, Ford said it was spiking a plan to build a new $1.6 billion plant in San Luis Potosi, and would instead invest $700 million over the next four years to expand its Flat Rock Assembly Plant in Michigan to build electric and self-driving vehicles.
Ford chief executive Mark Fields said the second-biggest US automaker was hopeful Trump’s policies will boost the US manufacturing environment. “It’s literally a vote of confidence around some of the pro-growth policies that he has been outlining and that’s why we’re making this decision to invest here in the US and our plant here in Michigan,” Fields told CNN. Earlier, GM became the latest multinational to end up in Trump’s line of fire - via Twitter as usual - with the president-elect threatening to impose and tariff on GM’s imports of a small number of Mexican-made Chevy Cruze cars to the US.
Trump took to Twitter again to crow about the Ford reversal. He posted a Fox News story with Ford’s logo touting the announcement. In a second Twitter message, Trump said: Instead of driving jobs and wealth away, AMERICA will become the world’s great magnet for INNOVATION & JOB CREATION.” Ford said yesterday’s moves would result in the additional of 700 new US jobs during the next four years. Ford said it would continue to develop its next generation Ford Focus at an existing plant in Hermosillo, Mexico.
“This will make way for two new iconic products at Michigan Assembly Plant in Wayne, Michigan, where Focus is manufactured today - safeguarding approximately 3,500 US jobs,” Ford said.
US President-elect Donald Trump yesterday blasted General Motors Co and threatened to impose a "big border tax" for making some Chevrolet Cruze cars in Mexico, which the US carmaker defended as part of a strategy to serve global customers, not sell them in the United States. "General Motors is sending Mexican made model of Chevy Cruze to US car dealers-tax free across border. Make in USA or pay big border tax!" Trump said in a post on Twitter.
GM said it makes its Cruze sedan in the United States and that all of those sold in the United States are made in a plant in Lordstown, Ohio. "GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the US." it said in a statement posed on its website without giving numbers.
Shares of GM rose 1 percent to $35.19 after falling about 1 percent following Trump's tweet before the market opened. Last month. Trump announced the formation of a council to advise him on job creation, a group comprised of leaders from a variety of major US corporations including GM Chief Executive Officer Mary Barra. GM said in 2015 it would build its nextgeneration Chevrolet Cruze compact in Mexico as automakers look to expand in the Latin American nation to take advantage of low labor costs and free trade agreements.
GM said in 2015 it would invest $350 million to produce the Cruze at its plant in Coahuila as part of the $5 billion investment in its Mexican plants announced in 2014. GM said earlier this year it would import some Cruze cars from Mexico. According to Automotive News, GM began producing the Cruze in Mexico last year, making 52,631 cars there. In comparison, it built 319,536 of them in the United States. Previous versions of the Cruze sold in Mexico were made in a GM South Korea plant, it reported.
The shift is part of a larger trend among Detroit's Big Three automakers to produce more small cars for the North American market in Mexico in an effort to lower labor costs, while using higher-paid US workers to build more profitable trucks, sport utility vehicles and luxury cars. In November, GM said it planned in early 2017 to lay off 2,000 employees at two US auto plants, including the one in Lordstown. US small car sales have been hurt by lagging consumer demand and low gas prices. GM's US Cruze sales are down 18 percent through November. Representatives for the United Auto Workers union could not be reached immediately for a response to Trump's tweet.
Trump's comments are the latest in a string of Tweets targeted at companies over jobs, imports and costs before he takes office on Jan. 20, including United Technologies Corp's Carrier unit and US defense companies. The Republican, who will succeed Democratic President Barack Obama, campaigned with tough rhetoric on trade and promises to protect American workers and called out several companies by name, including GM rival Ford Motor Co. — Reuters