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Ford Cancels $1.6 Billion Plant In Mexico, Announces Big Electric Car Push With U.S. Production

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In what will likely be touted as the biggest win yet for President-elect Donald Trump’s America-first economic plans, Ford CEO Mark Fields announced this morning that his company will cancel a $1.6 billion plant in Mexico and instead invest $700 million in Michigan to create 700 new U.S. jobs, according to news reports.


Fields said the automaker won’t build a new San Luis Potosi plant to produce the Ford Focus after all, but will expand its Flat Rock, Mich. plant to build electric and autonomous cars. The Focus will instead be built at an existing Mexican plant.

That comes as part of a huge electric vehicle push announced this morning: “13 new global electrified vehicles” in the next five years, including a hybrid F-150, a hybrid Mustang and a fully electric SUV. (More details on those cars coming soon.)


Here’s what Ford said in a statement:

To support the new era of vehicles, Ford is adding 700 direct new U.S. jobs and investing $700 million during the next four years, creating the new Manufacturing Innovation Center at its Flat Rock Assembly Plant. Employees there will build the all-new small utility vehicle with extended battery range as well as the fully autonomous vehicle for ride-hailing or ride-sharing – along with the iconic Mustang and Lincoln Continental.

“I am thrilled that we have been able to secure additional UAW-Ford jobs for American workers,” said Jimmy Settles, UAW vice president, National Ford Department. “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.”

This incremental investment in Flat Rock Assembly Plant comes from $1.6 billion the company previously had planned to invest in a new plant in Mexico.

Ford today announced it is cancelling plans for the new plant in San Luis Potosi, Mexico. It also announced that, to improve company profitability and ensure the financial as well as commercial success of this vehicle, the next-generation Focus will be built at an existing plant in Hermosillo, Mexico. This will make way for two new iconic products at Michigan Assembly Plant in Wayne, Michigan, where Focus is manufactured today – safeguarding approximately 3,500 U.S. jobs.

Previously Ford had said it would shift all small car production to Mexico after 2018, to focus on more lucrative truck and SUV production domestically instead.

CNBC also reports that “a high level source within Ford stressed Trump had nothing to do with their decision to expand production and hire more employees.”


But given that Trump has repeatedly threatened U.S. automakers, including Ford and General Motors just this morning with “big border tax(es)“ for car production in Mexico and a possible repeal of the North American Free Trade Agreement, it seems hard to believe the coming administration’s likely policies didn’t influence the decision on some level. At the same time, global small car sales are down, so Ford may have also decreed it a bad time to be putting a billion plus into a plant that would build the Focus.

More on this as we get it.