On Tuesday, after it had come under harsh criticism from President-elect Donald Trump for its Mexican investment plans, the Ford Motor Co (F.N) said it will cancel a planned $1.6 billion factory in Mexico and will instead invest $700 million at a factory in Michigan. Ford has pledged to build new electric, hybrid and autonomous vehicles at the Flat Rock, Michigan plant, which will add 700 new jobs.
Ford executive chairman Bill Ford Jr. said that he spoke with Trump to notify him of the decision. The decision, was reportedly influenced by Trump’s policy goals such as lowering taxes and regulations but there were no initial negotiations between Ford and the President-elect over the decision to cancel the Mexico plant or invest in Michigan.
Trump tweeted a link on Tuesday to a story about the decision.
— Donald J. Trump (@realDonaldTrump) January 3, 2017
Chief Executive Mark Fields said the decision to cancel the new plant in Mexico was in part related to the need to “fully utilize capacity at existing facilities” amid declining sales of small and medium sized cars such as the Fusion and Focus.
Fields also endorsed “pro-growth” tax and regulatory policies that were advocated by the President-elect. According to Fields, Ford will build a battery electric SUV with a 300-mile driving range at the Michigan plant by the year 2020, and will launch production there by 2021 of a fully autonomous vehicle without a steering wheel or a brake pedal for use in ride services fleets. Ford also plans to manufacture new hybrid versions of its F-150 pickup truck, Mustang and police vehicles by 2020.
In April, Ford announced it would invest $1.6 billion in the new plant in San Luis Potosi, Mexico to build small cars. The company said it will shift production from Michigan of its Focus to an existing plant in Hermosillo, Mexico. Trump had urged Ford to cancel the planned Mexican plant.
When he announced his campaign in June 2015, Trump predicted that Ford would cancel its investment plans for Mexico. “They’ll say, ‘Mr. President we’ve decided to move the plant back to the United States — we’re not going to build it in Mexico.’ That’s it. They have no choice,” he said. Since then, Trump repeated during the election campaign that if he became president, he would not allow Ford to open the new plant in Mexico, which he called an “absolute disgrace” and would not hesitate to slap hefty tariffs taxes on imported Ford vehicles.