In addition, there’s more demand for small cars in Mexico than in the US, he said. It will make small cars there starting in 2018.
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A spokeswoman for Ford F, -1.94% said Fields’ comments weren’t new news as Ford indicated past year it would stop making the Ford Focus and the C-Max small cars at the its MI assembly plant by 2018. “They’ll make their cars, they’ll employ thousands of people, not from this country, and they’ll sell their auto across the border”.
The new facility was announced back in April, and Ford indicated it would create 2,800 Mexican jobs. Given this, the company has chose to cut their costs, increase profitability, and reinvent the small cars market by moving the production to Mexico.
The United Auto Workers, the US union, has said the number of auto assembly jobs will not decline because workers will be busy making SUVs and pickup trucks. Americans don’t want to buy small vehicles at the moment (actually, they nearly never want to buy small cars), so Ford’s only rationale for continuing to build them is to satisfy more stringent federal fuel-economy standards in the future; and to have small cars around if gas prices spike and Americans go through one of their brief flirtations with Euro-scale rides. “And we’ll have nothing but more unemployment in Flint and Michigan”, Trump added. The Ford Fiesta, as its name suggests, is already being produced in Mexico, while the performance-based Focus RS is being made in Germany. Trump said, “We shouldn’t allow it to happen. We’re focused on usage where miles traveled be”, he said.
The backbone of the company’s new strategy entails building a fully driverless auto – without pedals or a steering wheel – to be used for commercial ride-hailing and on-demand taxi services by 2021.
A source briefed on the move told Reuters the shift of production to Mexico was expected to take place next year before the start of the 2018 model year.
“It’s quite natural for these auto companies to focus their USA based operations on making larger vehicles where the margins are much greater”, he continued.
Trump has targeted Ford since the start of his campaign even though almost all other automakers also have plants in Mexico and are either building new plants or expanding existing plants. The stock is down nearly 14 percent so far this year.
The updated outlook was presented Wednesday by Ford President and CEO Mark Fields at the company’s annual investor day.
Ford said it also is investing in the traditional business that still makes all its money. The transformation will come as the cost of electric-car batteries falls as much as 38 percent by 2030, while tougher regulations and higher fuel costs will drive up the cost of gasoline-powered cars, Ford said.
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– CUTTING COSTS: Ford says it will gain $3 billion each year in efficiencies between 2016 and 2018.
