Ford Motors cancels $1.6bn Mexico plant

Ford Motors cancels $1.6bn Mexico plant
January 03 19:00 2017

US car giant Ford has said it will cancel a $1.6bn plant it planned to build in Mexico but will extend its operations at its factory in Michigan.

Ford will invest $700m on expanding its plant at Flat Rock, Michigan.

It says it will build its new Focus at an existing plant in Hermosillo, Mexico, to improve profitability.

Earlier, President-elect Donald Trump tweeted his disapproval of rival General Motors’ production of a Chevy Cruze model in Mexico.

Mr Trump has also criticised Ford’s plans for investment in that country.

The planned $1.6bn plant was intended to be built in San Luis Potosi in Mexico, but Ford said it would now invest some of that sum in Flat Rock, creating 700 jobs to build a range of electric cars.

Hatchback

Earlier on Tuesday, Mr Trump criticised General Motors on Twitter for making cars built in Mexico available tax-free in the US.

“General Motors is sending Mexican made model of Chevy Cruze to US car dealers-tax free across border. Make in U.S.A. or pay big border tax!” he tweeted.

However, GM said most of its Chevy Cruze cars were made in the US.

A spokesman said only the hatchback model, which forms a small percentage of sales, was made in Mexico.

He added that the car was built there for global production and said that although some Cruze sedans were made in Mexico for a while last year, all the ones now sold in the US were manufactured in Ohio.

Glenn Johnson, president of a union at the Lordstown factory in Ohio, said there had been no protest about the move of sedan production across the border.

And responding to Mr Trump’s tweet, he said: “It makes for news, that’s all,”

Mr Trump has criticised other US industry titans since his election win and has vowed to make good on campaign promises to bring jobs back to America by, as he puts it, levelling the playing field.

However, some commentators have expressed concern that restricting imports could damage the US economy.

In November, GM said it would lay off around 1,250 workers at Lordstown and around 800 at its plant in Michigan from the middle of January, although some may find work at other factories.

BBC