Ford to open new auto plant in Mexico
Small-car production would move from Detroit, UAW reports
DETROIT — Ford Motor Co. plans to build a new $1.6 billion auto assembly plant in Mexico, creating about 2,800 jobs and shifting small-car production from the U.S. at a time when moving jobs south of the border has become an issue in the presidential campaign.
The company announced the plant in San Luis Potosi on Tuesday without saying specifically what cars it will build there. But the United Auto Workers union has said Ford plans to shift production of the Focus compact and C-Max small gas-electric hybrid from suburban Detroit to Mexico, where the cars can be made at lower cost and more profitably.
The UAW’s new four-year contract with Ford, signed last year, guarantees new vehicles for the Wayne, Mich., assembly plant and a $700 million investment that preserves the plant’s 3,924 jobs. Union members have said they expect the factory to get a new version of the Ranger small pickup and a new small SUV called the Bronco.
The announcement came on the day of the key Wisconsin primary and drew a strong response from Republican front-runner Donald Trump, who called Ford’s move “an absolute disgrace.” Trump has railed about corporate America moving jobs to Mexico to take advantage of what he calls a lopsided trade deal and has vowed to rewrite the 1994 North American Free Trade Agreement, tax imports and punish U.S. companies including Ford.
Trump said in a statement that transactions like Ford’s will not happen when he is president. “Cheap goods are not cheap when you consider the cost of lower wages and higher unemployment,” he said, adding that he would enforce trade rules and reduce the incentive for companies to send business elsewhere.
In response, Ford highlighted its investments in the U.S., saying that the company spends more than 80 percent of its capital in the U.S. and has committed to spending another $8 billion to $9 billion in the next four years.
“Since 2011 we’ve invested over $10 billion in our facilities. We’ve hired over 25,000 people” in the U.S., CEO Mark Fields said last month at the New York auto show.
Auto and other manufacturing jobs having been moving south for years. Mexican auto production more than doubled in the past decade, and the consulting firm IHS Automotive expects it to rise another 50 percent to just under 5 million vehicles by 2022. U.S. production is expected to increase only 3 percent, to 12.2 million vehicles, in the next 7 years.
Joe Hinrichs, Ford’s president of the Americas, said Ford is a global company that builds cars where it makes the most financial sense. He confirmed the new plant would build small cars starting in 2018. “We’ve talked about improving our small-car profitability and this is an important part of that,” he said Tuesday in an interview with The Associated Press.
Under the new UAW contract, Ford factory workers get about $60 per hour in wages and benefits, while auto workers in Mexico average about $8 per hour, according to the Center for Automotive Research.
“Companies continue to run to low-wage countries and import back into the United States. This is a broken system that needs to be fixed,” UAW chief Dennis Williams said.