Ford Cancels $1.6 Billion Mexico Plant; Trump Taken Out Of Picture?

Jan 04, 2017 06:40 AM EST | Leian N.

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Ford Motor Company recently announced that the $1.6 billion budget for a Mexico plant which will manufacture the small car models of the company has been cancelled. Instead, they have decided to move operations in both Illinois and Michigan. Was the decision stirred by Donald Trump's policies about building the wall?

General Motors, the mother company of Ford, based the decision to move to Illinois and Michigan after president-elect Donald Trump threatened American automakers who pushed through with opening plants outside of the State with new tariffs on important. Furthermore, the report also indicated that the move would create approximately 700 jobs in the United States, reported Washington Post.  

The report indicated that the company's decision to open a plant in Mexico was initially due to a decreased demand for their small vehicle models and to increase profitability due to lower fuel expenses overseas. In fact, the initial decision was finalized without consulting Trump first. 

However, Ford Motor Company CEO Mark Fields has considered the position of Trump with regards to opening the plant overseas. When the president-elect manifested that it would hurt the American company as large as Ford would seek better opportunities overseas. Thus, Fields and the rest of the board decided to continue operations within U.S. soil.

As reported by Automotive News, $700 million of investments would be placed under the Michigan plant for the production of slow-selling Ford Focus models. Furthermore, the investment would likewise improve conditions at the existing Flat Rock Assembly Plant where the Ford Mustang and Lincoln Continental models would be created along with the installation of autonomous hybrid and fully electric SUVs for the brand.

Ford Motor Company's decision to go back on its Mexico plans hurt Mexican officials as they had been promised work opportunities with the institution. However, it was manifested that Mexico would compel Ford to pay back the expenses on the initial developments already made unto the now-cancelled plant site.

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