DETROIT (AP) – Ford Motor Co. plans to build a new $1.6 billion auto assembly plant in Mexico, creating about 2,800 jobs and shifting small-car production from the U.S. at a time when moving jobs south of the border has become a major issue in the U.S. presidential campaign.
The company announced the plant in the San Luis Potosi state Tuesday without saying specifically what cars it will build there. But the United Auto Workers union has said Ford plans to shift production of the Focus compact and C-Max small gas-electric hybrid from suburban Detroit to Mexico, where the cars can be made at lower cost and more profitably.
The UAW’s new four-year contract with Ford, signed last year, guarantees new vehicles for the Wayne, Michigan, assembly plant in 2018 and 2020 and a $700 million investment that preserves the plant’s 3,924 jobs. Union members have said they expect the factory to get a new version of the Ranger small pickup and a new small SUV called the Bronco.
Ford announced the Mexican plant on the day of the key Wisconsin primary. Republican front-runner Donald Trump has railed about corporate America moving jobs to Mexico to take advantage of what he calls a lopsided trade agreement. He has vowed to rewrite the 1994 North American Free Trade Agreement, tax imports and punish U.S. companies including Ford.
The automaker has responded to Trump by highlighting it investments in the U.S. At the New York auto show in March, Ford CEO Mark Fields said the company spends more than 80 percent of its capital in the U.S. and has committed to spending another $8 billion to $9 billion in the next four years.