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.
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.
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.