Ford cancels Mexico plant, will boost US output

WASHINGTON: Ford announced Tuesday it is canceling plans to build a $1.6 billion plant in Mexico and will boost US production of electric vehicles, in part due to a better business environment under President-elect Donald Trump.

"Ford today announced it is canceling plans for the new plant in San Luis Potosi, Mexico," the company said in a statement.

At the same time, Ford is adding 700 US jobs and investing $700 million from the funds earmarked for the Mexico plant during the next four years to expand its Flat Rock Assembly Plant in Michigan so that it can build self-driving and electric vehicles.

Ford CEO Mark Fields told CNN the company looked at all the factors before making the decision "including what we view as a more positive US manufacturing business environment under President-elect Trump."

He said company chairman Bill Ford spoke Tuesday morning to Trump, who has been critical of Ford in the past, and just hours earlier slammed General Motors for importing some cars into the US market from Mexico.

"And it's literally a vote of confidence around some of the pro-growth policies that he has been outlining and that's why we're making this decision to invest here in the US and our plant here in Michigan," Fields said.

He said he spoke to Vice President-elect Mike Pence who "was very happy about the news and that we were making the investments here in America. Not only good for Ford, but good for the US and the American workers."

Fields said the move to focus on electric vehicles is part of a commitment made previously to invest $4.5 billion into developing those type of products.

"The reason we're doing this here is because our view is electrification is going to grow. We want to be a leader there," he said.

"We're investing in the products. And we're investing here in the US to build some of our most advanced products."