“It hit us like a bucket of cold water.” That’s how one prospective and hopeful automotive supplier described the effect of Tuesday’s announcement that Ford Motor Company had canceled plans for an assembly plant in San Luis Potosí.
Fernando Rosales Ortuño sells hydraulic hoses and had anticipated that Ford would become a client when the plant opened.
“Everyone here in the state and the region had looked forward to strong growth.”
Now, it appears, the metal framing that had begun rising on the 220-hectare site will be dismantled, and the signs indicating the location of the plant’s component manufacturing sectors will come down.
Already gone are the hopes the state had for maintaining strong economic growth through the addition of a third automotive plant (it is already the location of a General Motors factory and BMW’s new plant will begin operating in 2019) and the creation of 2,800 direct jobs and 10,000 indirect.
State officials heard the news of the plant’s cancelation just one hour before Ford CEO Mark Fields made the announcement. Economic Development Secretary Gustavo Puente Orozco said the company made it quite clear that the cancelation was permanent.
“They told us that it was mainly a market issue” and spoke of a decline in demand for the Ford Focus, the vehicle that would have been built in the US $1.6-billion facility, whose annual capacity would have been 350,000 units.
The economic losses of the decision could run into billions of dollars over the next five years, said the managing director of a firm that supplies auto manufacturers. Julian Eaves told Reuters it would have a “huge impact” on the local community.
A local realtor said between 40 and 50 suppliers were ready to set up shop and supply the new plant, and at least a dozen had already invested in land or signed contracts with developers.
Here in the central Mexican region where the country’s huge automotive industry is concentrated, the perception is that United States president-elect Donald Trump is already completing his promise to return manufacturing jobs to the U.S.
Said a site security guard with some bitterness, “It was on Mr. Trump’s orders.”
As construction workers packed up materials and prepared to leave there was shock and dejection among them.
“This is a massive kick in the teeth,” said one.
Rosales, the vendor of hydraulic hoses, said the site had begun to look like a cemetery.
He told Reuters: “[There is] only death here; we are all leaving.”