In a move that undoubtedly will serve as presidential debate fodder, Ford Motor Company CEO Mark Fields said Wednesday the automaker’s entire small-car production line will discontinue operations in the us and instead be run out of Mexico.
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The statement does not come as a surprise. “In North America, we will have migrated all of our small auto production to Mexico and out of the U.S”.
“That’s why we are expanding to sell more vehicles and provide transportation services at the same time”. The companies can pay Mexican workers less, which is particularly important for smaller and less expensive cars. Fields has responded that Ford invests far more in the USA, and needs to make sure it can build its smallest vehicles profitably.
“We are making choices: Where to play, where not to play and how we’re going to win”, Ford CEO Mark Fields told investors and Wall Street analysts who gathered at the company’s headquarters for a day-long presentation.
Ford shares have fallen almost 14% so far this year.
Shares of Ford Motor Company (NYSE:F) were down 1.94% in after-hours trading.
Ford’s share price has declined under Mr. Fields, who took over in 2014 after former chief Alan Mulally spent almost a decade unwinding earlier initiatives and getting Ford back to auto-making basics.
Republican presidential nominee has bee vocal about USA companies moving jobs to Mexico.
The new plant is expected to start production in early 2018.
Fields reiterated the company’s commitment to the US, noting Ford has added more than 28,000 jobs there in the last five years, and invested more than $12 billion. And we’ll have nothing but more unemployment in Flint and in MI.
Ford has plans to achieve cost efficiencies averaging $3 billion annually between 2016 and 2018 and is adding new processes like zero-base budgeting to further its business transformation. “This just happened. We shouldn’t allow it to happen”.
Ford also will place “a high priority on stable and sustainable dividends”, Fields said.
ALSO SEE: Ford Model E hybrid, electric range to include crossover as well? It’s targeting 8 percent margins for its traditional automotive business and margins of 20 percent or more for “emerging businesses”.
This announcement comes less than a year after the UAW signed a four year contract with Ford.
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