Ford to build $1.6B car plant in Mexico – The Detroit News
Ford Motor Co. on Tuesday confirmed that it would build a new assembly plant in the Mexico state of San Luis Potosi to improve the profitability of its small cars in a low-cost country.
The Dearborn automaker said it will invest $1.6 billion for the new plant, and will begin construction this summer and start producing vehicles in 2018. Ford said the new plant will create 2,800 direct jobs by 2020.
Ford’s announcement comes during a heated presidential primary in which trade deals and the loss of American jobs have become the center of campaign rhetoric for Republican Donald Trump and Democrat Bernie Sanders. Automakers including Toyota and General Motors Co. have invested heavily in the country to build its lower-profit margin cars because of Mexico’s low labor costs and favorable trade deals for exporting vehicles made there.
Joe Hinrichs, Ford’s President of the America would not comment Tuesday on how many or what small cars the plant would produce, or how many vehicles the plant could make per year. Reuters has previously reported the plant will produce up to 350,000 vehicles annually.
Ford last year said it would stop building its Focus and C-Max cars at its Michigan Assembly Plant and move production elsewhere. United Auto Workers officials said at the time that at least the Focus would move to Mexico. Ford executives have said they’re looking for a cheaper option to build lower-profit vehicles like the Focus and C-Max. Mexico would represent such an opportunity, but Hinrichs on Tuesday would not confirm those vehicles would be built at the new plant.
“Today’s announcement that Ford is investing in Mexico is a disappointment and very troubling,” UAW President Dennis Williams said in a statement. “For every investment in Mexico it means jobs that could have and should have been available right here in the USA. This is another example of what’s wrong with NAFTA and why the TPP would be a disaster for the citizens of the United States. 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.”
Trump has repeatedly said he’d impose a 35 percent import tariff on every vehicle Ford made in Mexico and tried to sell in the U.S. More broadly, public perception about the moves has been unfavorable; many believe the automaker is abandoning job and production opportunities stateside.
Not so, Ford says. Hinrichs on Tuesday noted that Ford last year built 80 percent of its North American vehicles in the U.S., and last year it built more cars and trucks here than any other automaker. During the last five years, Ford has invested $10.2 billion in the U.S. and has created 25,000 jobs, Hinrichs said. In its new four-year contract with the UAW, Ford committed to investing an additional $9 billion in the U.S. through 2019.
In 2015, Ford moved production of its medium-duty trucks from Mexico to its Ohio Assembly Plant, a deal worked out during the previous contract with the UAW.
“The facts bear out that our investment in the U.S. continues to be substantial,” Hinrichs said. “The investments in Mexico are not having an offsetting effect in the U.S.; we’re not losing any jobs at Michigan Assembly Plant or southeast Michigan.”
Last year, Ford announced it will invest $2.5 billion for two new engine and transmission plants in Mexico and an expansion of a diesel engine line that will create about 3,800 jobs.
Ford says Mexico is its fourth-largest manufacturing site, behind the U.S., China and Germany. It employs about 8,800 in Mexico — roughly one-tenth its number of U.S. workers, Ford said.
GM last year announced a $5 billion investment there over six years and Toyota said it will invest $1 billion in a Mexican plant. Fiat Chrysler Automobiles NV, BMW AG, Volkswagen AG and its Audi unit, Nissan Motor Co. and Kia Motors also have built or announced new plants or plant expansions there.
Automotive research firm IHS says Mexican car production has more than doubled in the past decade, and expects it to top 5 million vehicles annually by 2020.