In a move that could draw fresh fire in the presidential race, Ford Motor says it is shifting all North American small auto production from U.S.to Mexico.
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Speaking to investors, Fields said “Over the next two to three years, we will have migrated all of our small-car production to Mexico and out of the United States”. Profit margins on small cars are generally slimmer than those on larger cars or SUVs, so maintaining low labor costs can be more critical for these vehicles.
Ford says it is going to shift production of all of its small cars, like these Focus compacts, to Mexico. He added that Ford would have to pay a 35% tax on any vehicle that comes back to the US if he becomes president.
Instead of just being transparent and explaining that the shift will allow hourly workers in MI to have better job security by building more popular, profitable pickups and SUVs instead, Dearborn, Mich. -based Ford made a decision to leak its plan in drips and drabs starting in the summer of 2015.
That would spell bad news for Ford, which announced Wednesday that it would move all production of its small cars to Mexico in the next two years.
United Auto Workers union President Dennis Williams also has repeatedly blasted Ford and other automakers for investing so much money in Mexico. “It’s disgraceful our politicians let them get away with it”.
“He’s trying to impose costs on USA manufacturing that will make them less competitive”, Schott said.
Trump has repeatedly threatened to renegotiate or “terminate” NAFTA, the free trade deal between Canada, Mexico and America that allows Ford and others to ship cars duty-free across borders.
On Fox News Thursday, Trump said Ford would “fire all of their employees in the United States”.
Ford now makes some Fiestas in Mexico, but has kept production for some of its Focus and C-Max models in suburban Detroit. Last fall, the automaker made a commitment to invest $9 billion in USA plants, with about half going to 11 facilities in MI. Ford’s Fusion and Fiesta models are already made in Mexico.
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Ford shares fell 1.9 percent to close at $12.14. “This is another example of what’s wrong with NAFTA and why the TPP would be a disaster for the citizens of the United States”.
Fields said Ford is investing in “emerging opportunities” such as self-driving and electric vehicles, while the company will fortify its core business and leadership in pickup trucks, vans and performance vehicles.
“We’re not taking a USA plant, closing it down and replacing it with one in Mexico”, said Bernard Swiecki, a senior analyst at the center.
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However, Fields stopped short of saying what those vehicles will be.
