Ford is canceling plans to build a new plant in Mexico. It will invest $700 million in Michigan instead, creating 700 new U.S. jobs.
Ford CEO Mark Fields said the investment is a “vote of confidence” in the pro-business environment being created by Donald Trump. However, he stressed Ford did not do any sort of special deal with the president-elect.
The $700 million investment will go to the Flat Rock, Michigan plant to produce more electric and self-driving cars. Ford believes electric vehicles will outsell gas-powered vehicles within the next 15 years.
Ford Cancels Mexico Plant, Encouraged by Trump:
Ford is planning to roll out seven new electric vehicles in the next five years, including a Mustang Hybrid.
The news is a major U-turn for Ford. Trump repeatedly slammed Ford on the campaign trail for shipping U.S. jobs to Mexico (a claim the company said was wrong). All of the big car manufacturers currently have some production in Mexico. Just hours before the Ford announcement, Trump criticized GM (GM) for producing cars in Mexico.
Last year, Ford announced it would invest $1.6 billion in Mexico to transfer production of the Ford Focus from Michigan to Mexico to save costs. Now the Focus will be built at an existing plant in Hermosillo, Mexico, and Ford will instead expand its plant in Michigan.
Ford’s CEO tried to walk a delicate line on how much of a role Trump played in this major change in the company’s plans. He praised Trump for his vows to cut taxes and scale back regulations on businesses, but stressed Ford’s decision was “done independently.”
Trump threatened to slap a 35% tariff on Ford vehicles made in Mexico and sold in the U.S., although experts say it is not possible for Trump do that to a single U.S. company.
“When that car comes back across the border into our country that now comes in free, we’re gonna charge them a 35% tax,” Trump told Fox in September.
Trump won a lot of support from union workers for his tough talk on jobs going abroad. The United Auto Workers union that represents Ford workers was “thrilled” with Ford’s new plans. So were employees at the Flat Rock plant.
“It’s great news. Great for our future here, especially the new hires,” Chris Romano, a Ford factory worker in Flat Rock, told CNN. Workers at the plant make $20 to $30 an hour, Romano said. He believes it was a “good call” by Trump to pressure companies to keep jobs in the U.S. source
