Nearshore Americas

Ford Confirms It Won’t Scrap Mexican Expansion Plans

Ford Motor Co. has denied reports it has dropped its multi-billion dollar expansion program in Mexico. The reactions comes in the wake of Republican presidential candidate Donald Trump’s claim this week that the auto giant was scrapping its expansion plans in response to his threat to impose tax on its products in the United States.

“Word is that Ford Motor, because of my constant badgering at packed events, is going to cancel their deal to go to Mexico and stay in US,” Trump tweeted.

Trump has repeatedly attacked Ford since the automaker unveiled plans to invest $1.3 billion to build a new engine factory and expand existing operations in Chihuahua and another $1.2 billion to build a transmission plant in Guanajuato.

Operating in Mexico for nearly 90 years, Ford’s new projects are expected to generate 3,800 additional jobs in the Latin American country.

Trump said if he is elected to the White House he would propose imposing $35 in tax on all car parts imported from Mexico. But analysts have often brushed aside his threats, stating that the free-trade agreement (NAFTA) between North America countries would block imposing such taxes.

Under NAFTA, Trump may have to prove that Mexico is guilty of dumping practices. “Ford has not spoken with Mr. Trump, nor have we made any changes to our plans. We decided to move the F-650 and F-750 medium-duty trucks to Ohio Assembly in 2011, long before any candidates announced their intention to run for U.S. president,” the automaker has stated.

In other words, Ford says it is shifting production of heavy trucks — the F-650 and F-750 — from Mexico to a factory in Ohio.

Over the past few years, Mexico has emerged as a major global auto-manufacturing hub, drawing billions of dollars of investments from carmakers, including Nissan Motor Co., General Motors Co. and Volkswagen AG. Even Toyota Motor Corp has announced plans to spend around $1 billion to build a car factory in Mexico.

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Ford currently has 11,300 employees in Mexico, where it builds the Ford Fiesta, Fusion and Lincoln MKZ. In addition, the automaker’s Engineering Center in Mexico employs more than 1,100 engineers who support global projects.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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