Ford to cancel Mexico plant as part of reshoring plans

Posted on 8 Jan 2017 by Michael Cruickshank

US automaker Ford Motor Company has this week announced that it will cancel plans to expand Mexican production.

The company announced that it would not proceed with a planned $1.6bn manufacturing plant in San Luis Potosi, Mexico, and instead increase production in the US.

Specifically, Ford stated that it will invest $700m into upgrading an existing plant in Flat Rock, Michigan. The upgraded plant will reportedly be used to produce a number of high-tech products including electric, hybrid and autonomous vehicles. All up, the new investment is expected to create at least 700 new jobs for the community.

The news comes following the election of Donald Trump, who campaigned promising to bring manufacturing jobs back to the US. Just hours before Ford announced this move, the President-elect took to Twitter to deride competing automaker GM for its use of Mexican labour.

“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!,” Trump tweeted.

Ford reportedly stated that the move was taken due to poor sales of the small cars which were intended to be produced at the Mexican factory.

A ‘vote of confidence’ in Trump

While Ford officials claimed market conditions were behind the backtracked decision, its CEO, Mark Fields, seemed to take a different line.

“Our view is that we see a more positive US manufacturing business environment under President-elect Trump and the pro-growth policies and proposals that he’s talking about. So this is a vote of confidence for President-elect Trump and some of the policies that they may be pursuing,” Fields said at an event.

With Trump taking office in just two weeks time, it would appear some automakers are now taking seriously his threats to impose tariffs or take other actions to force them to reshore their manufacturing back to the US.

In response to the announcement, Trump once again took to Twitter, this time thanking Ford for the decision.

“Thank you to Ford for scrapping a new plant in Mexico and creating 700 new jobs in the US. This is just the beginning – much more to follow,” he wrote.