Ford has abandoned its planned US$1.6 billion car plant in Mexico, preferring instead to pump hundreds of million of dollars into the development in hometown Detroit of electric vehicles, including a hybrid Mustang.
The reversal comes a year after Ford announced construction of what would have been its second plant in Mexico and after US President-elect Donald Trump criticised Ford’s expansion in Mexico.
Trump threatened during his election campaign to impose hefty tariffs on vehicles imported from Mexico to the US. He has since talked of a “big border tax” on the Chevrolet Cruze General Motors builds in Mexico.
Ford CEO Mark Fields (above) called the decision to axe the Mexico development and invest Stateside a “vote of confidence” in Trump. “We’ve made this decision independently on what’s right for Ford, but we look at all the factors,” he said.
“Our view, we see a more positive US manufacturing business environment under President-elect Trump and the pro-growth policies and proposals he’s talking about.
“We believe that these tax and regulatory reforms are critically important to boost US competitiveness and of course drive a resurgence in American manufacturing and high-tech innovation.”
Ford’s planned US$700 million investment in electric vehicles at its Flat Rock plant in Michigan was applauded. United Auto Workers (UAW) union official Jimmy Settles (above) said he “cried tears of joy” on learning of the development, expected to create 700 new jobs.
Settles said it was “the equivalent of a new assembly plant. I’ve seen a lot, many peaks and valleys. This is at the top, because I know what it will mean for people at this plant and also in America.” Michigan Governor Rick Snyder thanked Ford for its “continued confidence in our state and our people.” Ford builds the Mustang (below) and Lincoln Continental at Flat Rock.
Ford intended to expand production of its Focus range at the now-abandoned site in San Luis Potosi, Mexico, but will now move assembly to its existing operation in Hermosillo. “We’ll be safeguarding the 2900 jobs that are there (Hermosillo), plus we’ll probably add about 200 jobs when we add Focus there,” said Fields.
Ford plans a US$4.5 billion investment in 13 new global electrified vehicles over the next five years. These include a plug-in hybrid Transit van, hybrid versions of the F-150 pick-up truck and Mustang, and a battery-electric SUV with a range of 500km.
The petrol-electric Mustang will launch in North America before being rolled out to other markets. It’s likely to mate the current base model Mustang’s 2.3-litre Ecoboost engine with an electric motor/generator to deliver power and torque to rival the 5.0-litre V8.
“As more and more consumers around the world become interested in electrified vehicles, Ford is committed to being a leader in providing consumers with a broad range of electrified vehicles, services and solutions that make people’s lives better,” said Fields.
“Our investments and expanding lineup reflect our view that global offerings of electrified vehicles will exceed gasoline-powered vehicles within the next 15 years.”