Ford Isn’t Changing its Mexico Plans Despite Trump Presidency

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2017-ford-focus

The presidential election is over and, shockingly, things don’t seem to have calmed down in the least. Some people are happy while others are in mourning. The business world is having to deal with the news, too, including Ford, who Trump notoriously called out during his campaign for opening a new plant in Mexico.

President-elect Trump went after Ford for opening a Mexico plant saying it would cost America jobs and was something he’d fight to prevent. Ford countered that it was introducing new vehicles for production in the US and that no jobs would be lost, but that wasn’t good enough for Trump.

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He vowed to impose a tariff that would make it too expensive to produce cars in Mexico in order to force Ford and every other automaker to keep production within the United States. Until election day, it was only a campaign promise, but now Trump is President-elect and he could follow through on that tariff.

CEO Mark Fields spoke about the potential 35 percent tariff at the Los Angeles Auto Show and acknowledged that it would have a huge impact on not only the auto industry but the whole US economy. There was no mention of changing their plans to build cars in Mexico despite the potential financial impact. Ford is standing by their original business plan.

They are currently building a $1.6 billion plant in Mexico. Once it’s ready, production of the Ford Focus will be moved across the border out of the company’s Michigan Assembly Plant. At first glance it would seem like the people currently working in that plant might be in trouble, but Fields has repeatedly said that those jobs will be safe due to the introduction of new vehicles.

Also unchanged by Trump’s election is Ford’s plan to pursue electrification. Trump is skeptical on climate change and there’s a chance he could ease up on CAFE fuel economy standards that have automakers scrambling to introduce increasingly fuel efficient vehicles. Although that might be something automakers would welcome, it won’t change Ford’s plan to pursue electrification. Their strategy is global, not national, with other areas of the world continuing to focus on reduced emissions and improved fuel economy even if Trump does relax CAFE standards.

We’re still two months away from a Trump presidency, so it’s too early to know exactly what will happen when he takes that seat in the Oval Office. Whatever changes he has planned, Ford plans to work with the president, but they have no intention of making drastic changes to their business plan for now.

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Nicole Wakelin

Nicole Wakelin