The website of the industrial park in San Luis Potosí continued to welcome Ford today. The website of the industrial park in San Luis Potosí continued to welcome Ford today.

Ford will reimburse state’s costs: governor

Governments express regret over loss of Ford plant in San Luis Potosí

The governor of San Luis Potosí, the state in which Ford Motor Company’s new assembly plant was to have been built, says he expects the auto maker to reimburse in full the expenses the state incurred in fulfilling the terms of the contract between the two.

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Ford announced this morning it was canceling its plans to build a US $1.6-billion plant in the state, where it would have built the Ford Focus. Production of the vehicle will be moved instead to the company’s existing plant in Sonora.

“The state government and Ford Motor Company will proceed in keeping with the framework agreement” which provides for the total reimbursement of costs borne by the state, said Governor Juan Manuel Carreras López.

The federal government weighed in with the observation that it would monitor the situation to ensure that reimbursement was made.

Economy Secretary Ildefonso Guajardo told Milenio Televisión that the government had made it clear to the president of Ford México that it would make sure the state was reimbursed in according with the agreed terms, and that any related penalties were paid as well.

Both officials expressed regret over the decision, with Guajardo observing that “the future of North America must be in the integration of value chains. Today, countries don’t compete as countries but as regions.”

The secretary said in another interview that he doesn’t expect a cascade of similar decisions to follow because Ford’s move was based on changes in demand for its models along with decisions by the incoming U.S. administration of Donald Trump.

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Ford said it would invest instead in a plant in Michigan, where it plans to invest $700 million to expand production of electric and hybrid vehicles.

The new factory in Mexico was going to be built on 220 hectares in the industrial park WTC 2 in the city of San Luis Potosí and would have begun production in 2018, creating 2,800 direct jobs and 10,000 indirect over five years.

It was intended to produce the Ford Focus and other compact cars, with annual output of 150,000 units.

The land had been donated by the state government.

Source: Milenio (sp), El Universal (sp), El Financiero (sp)

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  • G.b. Adams

    Good luck with that gov…Welcome to the real world of economic reality, not the protectionist dream world Mexico lives in.

    • AM

      Lol, “el burro hablando de orejas.” Porque no te ubicas, burro! Lol.

    • harvey

      and the world that the incoming President wants to also live in? The agreement was NAFTA – the North American Free Trade Agreement not USFTA – United States Free Trade Agreement, where the US gets access to other country’s markets but denies access to its own.

  • rojawi

    Missing from this article: other factors figured into Ford’s decision, like criticism from candidate Trump and the impression that the new US government might change regulations and trade relationships. Who knows, maybe there was a secret deal.

    Also missing: Ford is still going to move its Focus production to Mexico – just to Hermosillo, not SLP. http://www.nytimes.com/2017/01/03/business/ford-general-motors-trump.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news

    • Güerito

      As to your second point, from MND’s main article announcing the news earlier today:

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

      http://mexiconewsdaily.com/news/ford-cancels-plans-to-build-plant-in-slp/

    • Bonnie G

      Ford CEO today said that there was not secret deal and this was an economic decision and had nothing to do with the incoming administration – it was a lack of demand that caused them to make this decision.

      • Epazote

        I think the Wall Street Journal gives a pretty good read about where market share is going in their automotive sales stats (look at actual sales numbers versus % market share increase/decrease). The sales numbers don’t lie. Small cars are the industries biggest seller. Any decline Ford is experiencing in this hot market can only be due to a lack of consumer demand for their particular brand of car. Perhaps they remain unable or unwilling to compete with superior Japanese and Korean car makers and are using this excuse to cover up their own incompetence? Follow the link to see the stats

        http://online.wsj.com/mdc/public/page/2_3022-autosales.html

  • kallen

    If I were Mexico I would go easy on the demanding of reimbursement least US corporations think twice about investing south of the border if this is how their good intentions are going to be rewarded. I would also be walking a bit more softly since this could be perceived as retribution; Trump doesn’t seem like the kind of guy that turns the other cheek and if Mexico isn’t careful, they could lose a lot more than just a Ford plant.

    • Craig Wright

      …and encourage companies to make municipalities dance the idiot’s jig? It’s not a stretch to see a shake down on both sides of the border. In the US, companies only need to hint at leaving and Drumpf shells out money; in hopeful places wanting to attract plants, they will humiliate themselves for a smile. It’s a bad cycle, and companies, with their fiduciary responsibility, have the motive to keep it going.

  • David Nichols

    The people of SLP will never see one peso, whatever Ford pays will go directly into the pockets of the Governor…
    Ford is in business to make cars, J M Lopez is in politics to make $$$…

    • jdwfinger

      You took the words right out of my mouth

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