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Trump Effect? Ford Cancels Mexico Plant, Invests in Michigan Instead

Trump Effect? Ford Cancels Mexico Plant, Invests in Michigan Instead

Will invest $700 million into a Michigan plant

Ford has announced the company will cancel the $1.6 million plant it planned to build in Mexico. Instead, the company will invest $700 million in Michigan:

Ford (F) CEO Mark Fields said the investment is a “vote of confidence” in the pro-business environment president-elect Donald Trump is creating. However, he stressed Ford did not do any sort of special deal with Trump.

“We didn’t cut a deal with Trump. We did it for our business,” Fields told CNN’s Poppy Harlow in an exclusive interview Tuesday.

The $700 million investment will go to the Flat Rock, Michigan plant to produce more electric and self-driving cars. Ford believes electric vehicles will outsell gasoline-powered vehicles within the next 15 years.

However, he also admitted that production on the next Focus sedan will occur in Mexico, but will happen at an already existing plant.

Fields said at a press conference that while Ford remains “a global automaker,” the company’s “home is right here in the United States.”

The investment will create 700 temporary jobs, which will eventually turn into permanent positions, giving the Michigan plant an “hourly staff of about 3,600.”

Unions hailed Ford’s decision:

“I am thrilled that we have been able to secure additional UAW-Ford jobs for American workers,” UAW Vice President Jimmy Settles said in the release. “The men and women of Flat Rock Assembly have shown a great commitment to manufacturing quality products, and we look forward to their continued success with a new generation of high-tech vehicles.”

Trump blasted Ford on the campaign trail for moving production to Mexico. In November, Trump caused a ruckus when he boasted on Twitter that Bill Ford, Chairman of Ford, told him that the company planned to keep a plant in Louisville, KY.

Ford planned to move production of the Lincoln MKC to Mexico, not the entire plant.

At the end of 2015, “Ford announced a $1.3 billion investment in the Kentucky Truck Plant” to create 2,000 new jobs.

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“Trump repeatedly slammed Ford on the campaign trail, claiming the company was moving good manufacturing jobs to Mexico. He vowed to slap a 35% tariff on Ford vehicles made in Mexico and sold in the U.S.

Ford fought back against Trump’s rhetoric, saying he had his facts wrong and that the company never planned to cut any U.S. jobs.

Ford currently employs 85,000 Americans, up 28,000, or nearly 50%, in just the last five years. In Mexico, Ford employs 8,800.”

So, do the last five years get credited to “the Barack Effect”?

I hope not! Just as I hope Americans are smart than to fall for this hype tripe.

    Immolate in reply to Ragspierre. | January 3, 2017 at 3:29 pm

    Rags – is this chiefly smoke and mirrors for those not directly impacted? Yes. Does that mean that gestures such as these cannot serve a larger purpose? No. The game is perception, and whether you want Trump to get credit for a recovery or not, America is better off if our perception leads to us having one.

      Ragspierre in reply to Immolate. | January 3, 2017 at 3:55 pm

      Yah, I TOTS get it. Remember, I concentrated in Marketing, and your point about perceptions is exactly right.

      At the same time, I’m a cold, hard-headed rationalist. People can rah-rah, but I’ll call them on it.

Maybe. The “Trump Effect” is a hypothesis.

Henry Hawkins | January 3, 2017 at 3:21 pm

lol @ the estatic UAW goons, who will enjoy a windfall in dues – which they’ll keep giving to the Democrats.

ShoesNotSlippers | January 3, 2017 at 5:40 pm

Ford says it definitely IS a Trump effect. I think Ford knows more about their motivations than do the people here.

So there are 8800 jobs in Mexico and NOT in the USA currently. Gee thanks NAFTA. This Trump effect keeps 700 jobs from being added to the 8800 in Mexico. 700 more direct jobs here in USA, more jobs at other companies to support those 700 jobs, and more jobs to do the construction and plant improvements as part of the $700 million investment in plant and fixtures.

Yes the Trump effect is strong with this one, and Da Nile ain’t just a river in Egypt.

Of course this move is in the best interests of Ford Motor Company. Major businesses do not want the POTUS peeved at them. Juan Trippe found this out during WWII when he went head to head with FDR.

The US is THE market for consumer goods in the world. It accounts for over 26% of the WORLD’s consumer market. China comes in at #2 with a lousy 7% of the market. Canada and Mexico are running neck and neck [at #11 and #12 respectively] at a little over 2% apiece. See the amount of economic leverage that this gives the USA, if it chooses to use it. Just think of what a 35% tariff on consumer goods would do to the economies of China, Japan, Canada and Mexico, just to name a few. And, what do you think the down turn in foreign economies would do to the overseas operations of companies such as Ford, Carrier, et al?

This whole scenario doesn’t hold up. Ford is going to spend $700 million to upgrade their Flat Rock, MI plant to build all-electric Fords? In eight years, there have only been 400,000 electrics sold but 100,000 are Volts which are not all electric. These vehicles don’t fit our life style and our wide-open spaces.

Think about it, there have only been an average of 1,000 Volts sold per month and that was with the government’s $8,000 rebate. $700,000,000 to make 33 sales per day? That is probably about 3 hours of production time at Flat Rock.

When Ford bailed on the Edsel after two years, they had sold 110,000 cars!

Methinks that Ford will invest in 100,000 robots in order to reduce jobs – just as Carrier has said they will do with Trump’s generous grant to be paid by you-know-who.

    That’s good news. Thank you for the link, Ms. Eastman.

    Ragspierre in reply to Leslie Eastman. | January 4, 2017 at 12:22 pm

    “Shares of U.S. Steel closed at $34.87 in New York on Thursday and have more than quadrupled this year.”

    So, no cause>>>effect relationship to any-damn-body. Again.

    “Iron ore is having a Groundhog Day moment. Prices that were pumped up on speculative enthusiasm just capped the biggest weekly drop in six months, echoing a sharp rise and tumble seen in April and May that was driven by a surge and fade in trading in China, the largest buyer.”

    Wait…wut…???
    http://www.bloombergquint.com/china/2016/11/18/iron-set-for-biggest-weekly-slump-since-may-after-china-led-rise

      From the cite from Rags:

      “Don’t forget that most of the steel production in the U.S. is from electric-arc furnaces, not blast furnaces: their use of iron ore is relatively limited,” said Kirchlechner, referring to making steel from scrap rather than ore.”

      And don’t forget that US Steel’s promise to add 10,000 jobs runs counter to the sad fact that most of its mills are based upon the old-timey and dangerous blast furnace methodology. I have no idea why we should celebrate the recall of 200 workers from lay-off at the Minnesota taconite processing operation. That won’t even move the Minnesota unemployment rate.

      Sell everything based upon the “perception of improved prosperity” lie being floated by Trump and his chorus.

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