Ford Cancels Mexico Plant, Trump's Predictions Come True

By Cyrus Dhabhar

1 mins read

Published on January 4, 2017

Highlights

Trump stated that cars made in Mexico will be levied with a Border Tax
Ford said the move was to fully utilise capacity at existing facilities
Ford will invest 700 million dollars in its Michigan facility

The Ford Motor Company has announced that it is cancelling its plans to build a 1.6 billion dollar factory in Mexico. Ford has also added that it will invest a further 700 million dollars in its existing facility at Flat Rock in the state of Michigan where it will produce future products from the Ford lineup. The announcement comes following a statement made by United States President elect, Donald Trump that stated that cars made in the country of Mexico will be levied with a Big Border Tax. Trump has named the latest iteration of the Chevrolet Cruze as an example of a car that is made in Mexico but sells popularly in the United States and will be levied with the tax if General Motors does not shift its production back to the United States. Currently, the United States and Mexico have a trade agreement where taxes are not levied on products moved from Mexico to the United States. Following the statement, Mark Fields, Chief Executive of Ford Motor Company mentioned how the move was to fully utilize capacity at existing facilities in the midst of slumping sales of smaller Ford products like the Focus and the Fusion. Mark Fields also endorsed the ‘pro-growth’ policies that Trump and the Republican-led Congress plans to put into play post January 20, 2017 when Trump officially becomes the President. The investment and updates in the Flat Rock, Michigan plant will essentially be used to expand the line for a new electric SUV that Ford has in its books for 2020. This new SUV will have a range of over 480 kilometers and will take on the likes of Tesla and Volkswagen amongst others. The new factory will also build ford’s fully autonomous car which will be production ready for fleet usage in 2021. Ford also has plans to build a hybrid version of the F150 pickup, the Mustang and several police cars too to improve on its overall fuel economy and emissions ratings as a group. The updates to the factory will add close to 700 new jobs. Incidentally, Donald Trump in his election campaign speeches has categorically mentioned how Ford’s new factory in Mexico was an “absolute disgrace” and that he would slap hefty taxes on to any Ford vehicles that will be made in Mexico. In one of his campaign speeches, Trump said "They’ll say,‘Mr. President we’ve decided to move the plant back to the United States — we’re not going to build it in Mexico.’ That’s it. They have no choice”. Looks like Donald Trump did accurately predict this one then.