In April Ford announced it had decided to build a new $1.6 billion plant in San Luis Potosi, Mexico. President-elect Donald Trump opposed the idea. He called the automaker an “absolute disgrace” during his campaign.
This choice follows Trump’s criticism of General Motors. Trump threatened General Motors with a “border tax” on the compact cars made in Mexico. Trump tweeted, “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A. or pay big border tax!” GM contradicted the statement. The automaker planned to target global customers with its Mexico plants. The cars were not meant to sell in the U.S.
GM claims it made only 4,500 Cruzes in Mexico. Those vehicles sold here in the United States. At least 185,500 of the vehicles built in Ohio, sold throughout the United States.
On Tuesday Ford said it was abandoning the project in Mexico. Instead, it would bring over 700 jobs to Michigan instead. Ford will invest $70 million in the expansion of the factory in Flat Rock, Michigan. The Flat Rock factory will be making hybrid and autonomous vehicles.
Executives alerted Trump the moment they made their choice. CEO of Ford, Mike Fields, commended the tax regulations Trump fought for. Meanwhile, outside of the plant in Flat Rock, workers praised the announcement.
According to Fortune, Ford saves an estimated $500 million by making this decision. Unfortunately, the Mexican government appeared disappointed in Ford’s choice. The Mexican government also had insurance that the automaker would compensate for its withdraw.
Ford still has the Hermosillo plant in Mexico and plans to shift its production of the Focus there.
Trump made the repercussions for Ford known during his campaign. He stated that any Ford vehicle imported from Mexico would be heavily taxed. Yet Ford isn’t the only one on the receiving end of Trump’s wrath.
Trump commended companies like Boeing and United Technologies for productions out of the country. Companies attempting to sell overseas would receive a thirty-five percent on exports into the U.S.
By the year 2020, Ford will make an electric SUV in Michigan that has a 300-mile range. The automaker wants consumers to be on the lookout for a fully autonomous car by 2021. Fields says his decision was “a vote of confidence” in the U.S. President-elect. He also says that whether Trump became president or not, Ford would have come to this decision.
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