Ford To Build New Auto Plant In Mexico

Ford this week confirmed long-suspected plans to construct a new plant in Mexico to build smaller cars.

Ford this week confirmed long-suspected plans to construct a new plant in Mexico to build smaller cars.

The Dearborn, Mich., automaker on Tuesday announced that it would build a $1.6 billion facility in the state of San Luis Potosí that will directly employ about 2,800 workers.

The company will begin construction this summer with production slated to begin in 2018.

Ford officials said that the vehicles slated for production at the plant will be announced at a later date, but observers long anticipated that Mexico would be the likely target for the Focus and C-Max models after plans to suspend their production in Wayne, Mich., were announced last year.

In February, the Wall Street Journal reported that Ford planned to double its production capacity in Mexico, including a new facility in San Luis Potosí and an expansion in Mexico City.

The company reportedly hoped to build small models in Mexico — whose low wages and friendly trade terms fueled a burgeoning auto industry — since sales of those vehicles were hurt by low gas prices in the U.S.

Ford's U.S. operations, meanwhile, would focus on more profitable trucks and SUVs. The automaker's latest contract with the United Auto Workers union included billions in new domestic investment and a provision for new production at the Wayne plant.

Still, UAW President Dennis Williams characterized this week's announcement as "a disappointment and very troubling."

"For every investment in Mexico, it means jobs that could have and should have been available right here in the U.S.A.," Williams said in a statement. He blamed free-trade agreements for companies that "continue to run to low-wage countries" and said that a forthcoming pact across the Pacific Rim "would be a disaster."

Ford officials responded that the announcement was "consistent with the discussions we had with the UAW last fall" and that it would "improve the profitability of our small-car lineup."

“I don’t want to speak for any political candidates, but I think the facts strongly support how committed we are to the U.S.,” Ford Americas chief Joe Hinrichs told Bloomberg.

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