Automaker Ford Revokes Plans to Open Auto Plant in Mexico; To Invest $700m in Michigan Plant

Ford Motors had earlier perfected plans to open an auto assembly plant worth $1.6 billion in Mexico, but with President-elect Donald Trump coming to power in a few days, the automaker has cancelled the Mexico auto project and would rather invest $700m in a Michigan auto plant, CBS News reports.

The Mexican government expressed serious disappointments with Ford’s decision and demands for a refund of funds the government had invested to facilitate the construction of the auto plant in San Luis Potosi, Mexico.

It is not clear whether Ford had this change of mind as a result of the accusation Donald Trump leveled against General Motors on Tuesday, accusing them of importing Mexican-made Chevrolet Cruze cars into the US free of border taxes. Donald tweeted that GM should “make in USA or pay big border tax!”

Ford Motors

But Ford CEO Mark Fields, who confirmed he spoke earlier with Donald Trump and VP-elect Mike Pence, disagreed that Trump’s threat to GM influenced his company’s decision to cancel the Mexico auto plant project. He simply said “we just don’t need the capacity anymore.”

“We look at a lot of different factors,” Field clarified. “We do what’s right for the business, but one of the factors we look at is what we expect to be a more positive manufacturing business environment under President-elect Trump, and also looking at the pro-growth policies and reforms, both tax and regulatory reforms, that he’s been talking about. It is a consideration, and it is a vote of confidence that he’ll be able to deliver on those things.”

But it doesn’t appear Field is being whole truthful here since Ford rescinded its decision to produce in Mexico a few hours after Trump tweeted his threat at GM.

“Let me give you the bad news: every car, every truck and every part manufactured in this plant that comes across the border, we’re going to charge you a 35% tax — OK? — and that tax is going to be paid simultaneously with the transaction,” Trump had threatened during his campaigns, Forbes wrote.

Ford said its switch of plans to set up the Flat Rock Assembly Plant in Michigan is because the company wants to go into the production of electric and autonomous, self-driving cars; plus the fact that the Michigan plan will create 700 direct new jobs to Americans. To this extent, the company revealed that it will be launching seven of its 13 new electric cars within the next five years across the world.

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