Through the wonders of social media, President-elect Donald Trump has suppressed Ford’s expansion in Mexico. Next up? General Motors. Alex Kreetzer reports.
Ford has announced it will cancel its $1.6 billion assembly plant in Mexico, following constant – and overwhelming – pressure from President-elect Donald Trump through a series of Tweets. To Mr. Trump’s delight, the US automaker will now invest $700 million in Flat Rock, Michigan to build and develop electric vehicles and autonomous technology through a new Manufacturing Innovation Centre. This will bring approximately 700 direct new jobs in the region over the next four years.
Last year, Ford planned to manufacture the next generation Focus sedan in the new Mexican plant, though it will now use its existing plant in Hermosillo. When asked whether Ford would have made the same decision if Trump wasn’t elected, CEO Mark Fields quickly answered: “Yes, absolutely,” which must be taken with a pinch of salt. Following the outcome, many have voiced their disappointment, including threats from Mexican officials for the automakers to pay back any money spent on the now abandoned facility. Fields argues that the main reason for not building the plant was due to the market demand and backed Trump, stating that he sees “a more positive US manufacturing business environment under President-elect Trump and the pro-growth policies and proposals he’s talking about.”
Ford also announced the details of seven new EVs to be added to its lineup by the end of the decade, including a fully-electric small SUV, high-volume autonomous hybrid and a hybrid Mustang – all built in Flat Rock. Two new hybrid police vehicles will be built in Chicago whilst, across the pond, a Ford Transit plug-in hybrid will be built in 2019. This supports Field’s argument of investing in future mobility and transport at its US Manufacturing Innovation Centre, rather than in Mexican production, although it is hard to agree that the President-elect’s Tweet played no role in the decision.
Now attention turns to General Motors, who are under the same pressure from Trump with its Chevrolet Cruze. On January 3, Trump Tweeted: “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers – tax free across border. Make in U.S.A or pay big border tax!” However, GM was quick to respond, stressing that the exports of the hatchback into the US were miniscule, with only 4,500 (out of a total 190,000 produced) transported over the border. The automaker stated: “General Motors manufactures the Chevrolet Cruze sedan in Lordstown, Ohio. All Chevrolet Cruze sedans sold in the US are built in GM’s assembly plant in Lordstown, Ohio. GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the US.” This makes GM’s Mexican Cruze production amount to less than a day of output from the Lordstown facility.
Only time will tell what will happen, however Trump has mostly focused his sights on Ford rather than GM in the past, with CEO Mary Barra sitting on the President-elect’s panel of business advisors. So it will be interesting to see how developments will unfold between the two parties.