Ford Won’t Build Now-Dead Focus Active Crossover in U.S. to Avoid Tariffs

When Ford introduced the new Focus earlier this year, it looked like the kind of car that would soon challenge the best in the segment. But before long, Ford announced the only Focus the U.S. would get was its lifted Subaru Crosstrek competitor, the Focus Active. Now that plan has changed, too, thanks to the Trump administration’s tariffs and the higher cost of building small cars in the U.S.

A little over a week ago, Automotive News reported that Ford’s plans to bring the Focus Active to the U.S. were dead. The Michigan-based automaker blamed the Trump administration’s tariffs, saying it would no longer be profitable enough to justify importing the Chinese-built crossover. The fact that it expected to sell a relatively small number of Focus Actives here each year was reportedly a contributing factor, as well.

“The impact to our future sales is expected to be marginal,” said Kumar Galhotra, president of Ford North America, in a call with reporters. “Our viewpoint is that, given the tariffs, our costs would be substantially higher. Our resources could be better deployed at this stage.”

Yesterday, President Trump responded to Ford’s decision with a tweet suggesting Ford build the Focus Active in the U.S. instead.

“Ford has abruptly killed a plan to sell a Chinese-made small vehicle in the U.S. because of the prospect of higher U.S. Tariffs.” CNBC. This is just the beginning. This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs!

— Donald J. Trump (@realDonaldTrump) September 9, 2018

Unfortunately for automakers such as Ford, building a car in the U.S. is easier said than done. It took only a few hours for a Ford spokesperson to nix the idea in a response to an article by The Washington Times, a right-wing publication not to be confused with The Washington Post.

It would not be profitable to build the Focus Active in the U.S. given an expected annual sales volume of fewer than 50,000 units and its competitive segment.

Ford is proud to employ more U.S. hourly workers and build more vehicles in the U.S. than any other automaker.

— Mike Levine (@mrlevine) September 9, 2018

Levine later expanded that last point with a tweet highlighting how large Ford’s manufacturing presence is in the U.S.

Ford has 85,000+ U.S. employees, including more hourly employees than any other automaker

3,200+ Ford dealers support another 166,140 U.S. jobs

80% of what Ford sells in the U.S. is built in the U.S.

Ford makes more vehicles in the U.S. than any other automaker

????????????????????

— Mike Levine (@mrlevine) September 9, 2018

Jon Gabrielsen, a market economist who focuses on the automotive industry, was less kind to the administration when he spoke to the Detroit Free Press on the issue. “This is further evidence that neither the president nor his trade representatives have any clue of the complexities of global supply chains,” Gabrielsen said. “This forces Ford to forfeit the sales they would have had if they could continue to import that low-volume niche vehicle.”

The Focus Active may be the first car officially killed by the administration’s tariffs, but it likely won’t be the last. There’s also no way to know how many additional cars automakers would have chosen to sell here if the tariffs hadn’t been implemented.

On the other hand, if you start to see Ford employees wearing, “Tariffs not only impose immense economic costs but also fail to achieve their primary policy aims and foster political dysfunction along the way,” shirts, at least you’ll know why.

Source: Automotive News, Mike Levine via Twitter, Detroit Free Press

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