Ford Cancels Mexico Plant, Adding Jobs, Vehicles in Michigan

Ford is investing $700 million at its Flat Rock plant in Michigan for a 300-mile-range electric SUV and assembly of autonomous vehicles while announcing it will cancel plans to build a new engine plant in Mexico. In addition, CEO Mark Fields confirmed the automaker is working on an F-150 hybrid pickup, a V-8 hybrid Mustang, a plug-in Transit Custom commercial van for Europe, and two new hybrid police vehicles.

The fire hose of news comes as President-elect Donald Trump has threatened to tax General Motors for vehicles made in Mexico and sold in the U.S. And it comes only weeks after CEO Mary Barra announced GM will start building driverless cars at a plant in Michigan and has started testing autonomous vehicles in Michigan on the heels of legislation allowing such vehicles on public roads.

Bill Ford notified Trump of the news and Fields called incoming vice president Mike Pence this morning to tell them of the cancelled Mexico plant and both were “very pleased.”

“This is a vote of confidence for President-elect Trump and some of the policies he may be pursuing,” Fields said, expressing optimism the business environment in the U.S. will improve. The CEO said he did not know if Trump would go through with threats of high tariffs on vehicles made in Mexico and exported to the U.S.

But Fields stressed the moves are not political, calling it a business decision made recently that reflects slow sales of small cars. The result is Ford will not build a $1.6 billion plant in San Luis Potosi, Mexico, to make the Ford Focus in 2018 when production ceases at the Michigan Assembly Plant. Rather Ford will expand its Hermosillo, Mexico, plant to add Focus production there, as well as about 200 jobs, a diversion of investment that will save Ford $500 million a year.

The 2,800 jobs that would have been added in Mexico have vaporized. Ford had started clearing the land in May but construction of the new plant had not progressed, Fields said. Mexican officials were notified and expressed “some disappointment.”

Some of the jobs will materialize in the U.S. Fields was at the Flat Rock plant to announce the addition of 700 new jobs in 2018 and an investment of $700 million over the next four years to create a new factory, to be called the Manufacturing Innovation Center, which will make autonomous and electric vehicles. The plant will continue to make the Mustang and Lincoln Continental.

Ford is investing $4.5 billion in electrified vehicles by 2020 with 13 vehicles to launch globally. Fields outlined seven of them:

• F-150 hybrid to be built at the Dearborn Truck Plant and coming by 2020 with increased towing and payload capacity as well as the ability to operate as a mobile generator. More details are expected at the North American International Auto Show next week if the news does not come out this week at the CES trade show.
• Mustang Hybrid, with electric motors augmenting the V-8, is coming in 2020.
• All-new fully electric compact crossover with a range of more than 300 miles coming by 2020, to be built at Flat Rock. Fields called it a “breakthrough vehicle for Ford.”
•  Transit Custom plug-in hybrid for Europe in 2019.
• Two new hybrid Pursuit police vehicles, one of which will be built in Chicago.
• High-volume autonomous vehicle for ride sharing and commercial ride hailing to be built at Flat Rock and debut in 2021. The first four driverless cars will be hybrids built at the Michigan plant.

Additionally, Ford is piloting new wireless technology for recharging electric vehicles and a fleet of 20 Transit Connect hybrid taxi and van prototypes will be tested in New York and other major cities.

 

 

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