Ford's Sonora plant where the Focus will be built. Ford's Sonora plant where the Focus will be built.

Ford cancels plans to build plant in SLP

Ford Focus production will move to Hermosillo instead

Ford Motor Company has canceled its plans to build a US $1.6-billion assembly plant in San Luis Potosí, and will invest instead at a factory in Michigan.

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A move that many will see as capitulation to United States president-elect Donald Trump, who has been highly critical of the auto maker’s plans to continue to move production to Mexico, was carried out “for our business,” said Ford CEO Mark Fields today.

Fields told CNN that the move is a “vote of confidence” in the pro-business environment that Trump is creating, and denied there was a special deal behind the decision.

“We didn’t cut a deal with Trump. We did it for our business,” he said in an exclusive interview.

The peso lost almost 0.7% on the news, dropping to 20.88 to the U.S. dollar.

The United States’ second biggest automotive manufacturer announced in April last year it would build the new plant in Mexico, where it would move production of the Ford Focus from Michigan.

The announcement was followed a day later by a declaration by then-candidate Trump that Ford’s plan was “an absolute disgrace,” and demonstrated the need to renegotiate the North American Free Trade Agreement “to create a fair deal for American workers.”

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Two weeks earlier, Ford’s Mark Fields said the company would make foreign investments if they made sense.

Later in the election campaign, Trump said he would put a 35% tariff on Ford vehicles made in Mexico and sold in the U.S.

Now, the Focus will still be produced in Mexico, but at the company’s existing plant in Hermosillo, Sonora.

“Our announcements today are really a vote of confidence in the [U.S.] economy,” Fields said.

Meanwhile, Trump turned his attention to General Motors this morning, threatening to impose a “big border tax” for manufacturing some of its Chevrolet Cruze models in Mexico

“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!” Trump said in a post on Twitter.

GM has been manufacturing the Cruze at its plant in Ramos Arizpe, Coahuila, since 2008.

Source: CNN (en), Fox News (en), Reuters (en)

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  • Güerito

    I’ve previously posted that before anyone gave Trump a chance, the Mexican economy was showing grave signs of weakness. When EPN came in, the peso was at 13. It reached 19 in early 2016, showing most of the devaluation during his term occurred well before Trump entered the scene. Most of that devaluation was based on growing public debt and an underperforming economy.

    Mexican economic growth over the last four years hasn’t climbed above 2%. That’s not even enough to create jobs for young people entering the workforce. The little job creation that occurs is in low paying sectors. Which is why employment in the informal economy and poverty have been increasing.

    Perhaps the only positive thing for the economy has been low inflation, despite the devaluations. And now gas prices are rising 20%.

    And now this Ford thing.

    And we can expect hundreds of thousands (millions?) of returning Mexicans in the near future.

  • From South of the Border

    This is only the beginning..Mexico can’t compete with a strong president of the U.S. plus sound economics which EPN has no clue what sound economics is!! The tide is turning economically and it will soon change at the Rio Grande as well. I came to Mexico legally it is about time Mexicans did the same thing in going to the U.S. President Trump will make sure of that!!

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