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Ford Cancels Construction Of $1.6B Plant In Mexico

The Ford Motor Company has decided to cancel plans to invest $1.6 billion for a new plant in Mexico. Jorge Valencia of KJZZ’s Mexico City Bureau gave us the details.

And we spoke with ASU Business Professor Arnold Maltz about what impact that decision could have on Arizona — and trade between the state and Mexico.

Ford Motor Co. executives said Tuesday that they were scrapping a project to build a $1.6 billion facility in Mexico, instead choosing to move those planned operations to an existing factory in Mexico, and investing $700 million in a Michigan plant that will build electric vehicles.

Company executives, who had been criticized by President-elect Donald Trump during his campaign for shifting small car production south of the border, said they were revising their plans to better serve future demand for electric and hybrid vehicles.

Still, in remarks at a factory in Flat Rock, Michigan, Chief Executive Officer Mark Fields gave a nod to the incoming administration.

“We're also encouraged by the pro-growth policies that President-elect Trump and the new congress have indicated that they will pursue,” Fields said.

The second-largest automaker cancelled its plans for a plant in the North Central state of San Luis Potosi, which according to Mexican media reports would’ve occupied 240 acres and employed 2,800 workers.

The next generation Focus compact car will be built at an existing factory in Hermosillo, the capital of Arizona’s border state of Sonora. The company will invest $700 million and add 700 jobs at its plant in Flat Rock, Fields said.

Mexican officials said they planned on billing Ford for investments the state has already made for the project, including for plans, development for sewage and roads to the plant.

“Both the finance secretary and the economic development office will quantify the corresponding amounts,” said San Luis Potosi Governor Jose Manuel Carreras, according to El Financiero.

Jorge Valencia was a senior field correspondent at KJZZ from 2016 to 2019.