Ford Moving its Small Car Manufacturing Units to Mexico

An announcement that drew another rebuke from Republican presidential candidate Donald Trump, Ford Motor Co Chief Executive Officer Mark Fields said on Wednesday that all of the company’s small-car production would be heading to lower coast Mexico and would be leaving U.S. plants.

“We will have migrated all of our small-car production to Mexico and out of the United States,” over the next two to three years, Fields told Wall Street analysts at an investor conference hosted by the automaker.

Ford’s decision was termed as “horrible” by Trump who was campaigning in Flint, Michigan, on Wednesday. He has vowed to pressure the automaker to reverse course if elected and has criticized Ford’s Mexican investments for more than a year.

“We shouldn’t allow it to happen,” Trump said.

As a global company Ford must compete by making solid business decisions, Fields has previously said in response to Trump’s criticism.

It would invest $1.6 billion in Mexico for small-car production to start in 2018, Ford had said earlier this year.

Ford has said that it would move Focus and C-Max production out of its Wayne, Michigan, plant in 2018, the company had confirmed during contract talks in 2015.

Ford planned to build the next Focus in Mexico, the United Auto Workers Union had said at the time.

Before the start of the 2018 model year, the shift of production to Mexico was expected to take place next year, reported the media citing a source briefed on the matter.

It was planning to build two new vehicles at the Wayne plant beginning in 2018, Ford had reiterated in April. They expect Ford to build a new Bronco SUV and Ranger pickup there, analysts have said.

Ford’s Western European car production could be affected by its decision to shift a majority of its small car production around the world to low-cost countries by 2019, which the company had already planned, Fields has said.

In order to emphasize truck and Jeep production over car output, it would realign North American plants, Fiat Chrysler Automobiles NV said in April. The changes are expected to be completed by early 2018.

In recent years, data has shown that U.S. consumers have turned away from traditional sedans and hatchbacks to SUVs and pickup trucks and this is he primary reason that both automakers are making the moves.

Since workers would be busy making SUVs and pickup trucks, the number of auto assembly jobs would not decline due to the realignments and shifting, the United Auto Workers has said.

However, consumers might once again favor smaller cars, if gasoline prices rose again above $4 per gallon as in mid-2008 and it was a risk, UAW President Dennis Williams has said.

(Adapted from CNBC)


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