Category Archives: Automotive

Ford’s Mexico move is about production efficiency

Automotive News – On the surface, Ford Motor Co.’s decision to scrap a $1.6 billion Mexican plant and invest $700 million in Michigan is a public relations victory. It makes peace with the incoming Trump administration that repeatedly berated Ford on the campaign trail. But in reality, the decision has more to do with good business practices — namely, using plant capacity and coping with a drop in demand for small cars — than any tariff threat or aggressive tweets from the president-elect.

The real reason Ford ditched plans for Mexico plant

Washington Post – Analysts say Ford’s decision to ditch plans to build a Mexico plant stemmed more from its long-term goals than the new administration or devotion to U.S. workers. The company aims to invest $4.5 billion in electric vehicles by 2020.

Ford cancels plans for $1.6 billion small car plant in Mexico

A Ford dealership in the United States.
A Ford dealership in the United States.

By Christina Rogers and John D. Stoll / Wall Street Journal

Ford Motor Co. said Tuesday it is scrapping plans for a new $1.6 billion assembly plant in Mexico, instead choosing to build small cars in an existing Mexican factory, and invest $700 million in a Michigan facility that will build electric vehicles.

The move is a surprising turnaround for Ford after facing criticism by President-elect Donald Trump for more than a year in relation to its Mexico plan.

Last month, Chief Executive Mark Fields said it was looking to work with the incoming administration on Trump’s trade agenda, but indicated it was too late to change its specific plan to build a new factory in Mexico.

The announcement comes just hours after Trump criticized Ford rival General Motors Co. for sending some of its Chevrolet Cruze production from Mexico to U.S. dealerships and paying no taxes. Trump has used the auto industry as an example of why the North American Free Trade Agreement needs to be retooled.

GM counters Trump on claim Chevy Cruz built in Mexico

Tech Crunch – On Tuesday morning, Donald Trump tweeted that the Chevrolet Cruze sold in the U.S. is being manufactured in Mexico and sold tax-free via dealers across the border in the U.S. GM responded to the claim with a statement clarifying exactly where it makes the Cruze it retails in the U.S., which it turns out is primarily in Ohio.

Electric-car startup to manufacture in Arizona, Sonora

Arizona Daily Sun – A California startup will build a $700 million plant in Casa Grande to manufacture luxury electric vehicles. The plan by Lucid Motors will involve having at least some of the parts built in Mexico and shipped to Arizona for final construction.

Ford going ahead with moving production to Mexico

Reuters – Ford Motor Co is moving ahead with plans to shift production of small cars to Mexico from Michigan, while “two very important products” will be built in its U.S. factories, Chief Executive Officer Mark Fields says. President-elect Donald Trump has criticized Ford for the decision to shift production of Focus small cars to Mexico in 2018, and said he would consider levying tariffs on Mexican-made Fords.

Small cars, not U.S. job, moving to Mexico

CNBC – Before Donald Trump takes to the debate stage Wednesday night for one last chance to prove U.S. trade policy is letting Mexico steal Michigan and Ohio’s auto jobs, he might want to do some research on manufacturing trends in the global auto industry.

Mexico’s biggest and fastest-growing carmakers aren’t American brands like Ford and General Motors’ Chevy. The biggest Mexican carmaker is Nissan, and the newest plants belong to Audi and Kia, with big BMW and Toyota plants in the pipeline.

Surging small-car market is Mexico’s other auto success

Automotive News – It’s not just the wages. There’s another motivation for automakers flocking to Mexico to build small cars that would be tough to build profitably in high-wage nations like the U.S., Japan and Germany: the booming local market.

Mexico’s auto market is enjoying an 18 percent gain in new-vehicle sales through September, on top of 2015’s sales gain of 19 percent, breaking all volume records. And the meat of the market is small cars.

GM invests in Mexico as Ford absorbs Trump blows

Bloomberg -After more than a year of watching Republican presidential candidate Donald Trump bash Ford Motor Co. for moving jobs to Mexico, General Motors Co. has pushed ahead with its own expansion. It just hasn’t said as much as Ford.

GM is advancing on an $800 million investment for its global small-car lineup that includes a factory retooling in San Luis Potosi state. That plant and another factory in Mexico will also build the redesigned Chevy Equinox crossover next year, people familiar with the matter said.

The automaker has only said that the next Equinox will be built in a factory in Canada and two other sites, keeping mum about Mexico and avoiding both attention from Trump and the chance that the news might have roiled labor talks in Canada last month, said the people, who asked not to be identified because the matter is private.

Ford is shifting all small-car production to Mexico

A bus passes in front of a Ford logo near a sales store of the automaker in Mexico City, Mexico, April 5, 2016. REUTERS/Edgard Garrido - RTSDR7L
A bus passes in front of a Ford logo near a sales store of the automaker in Mexico City, Mexico, April 5, 2016. REUTERS/Edgard Garrido – RTSDR7L

By Greg Gardner and Brent Snavely / Detroit Free Press

Ford plans to eventually shift all North American small-car production from the U.S. to Mexico, CEO Mark Fields told investors Tuesday, even though the company’s production investments in Mexico have become a lightning rod for controversy in the presidential election.

“Over the next two to three years, we will have migrated all of our small-car production to Mexico and out of the United States,” Fields said at a daylong investor conference in Dearborn.

The news sparked a fresh round of criticism of Ford from Republican Presidential candidate Donald Trump, who was campaigning in Flint on Wednesday.

“We shouldn’t allow it to happen. They’ll make their cars, they’ll employ thousands of people, not from this country, and they’ll sell their car across the border,” Trump said during his visit. “When we send our jobs out of Michigan, we’re also sending our tax base.”

The impact on Ford’s U.S. employment will be minimal in the near-term. Ford already builds the Fiesta subcompact and the Fusion mid-size sedan in Mexico. There is an expectation that Ford will build a new Ranger mid-size pickup truck in Wayne and possibly a new Bronco compact sport-utility.

Ford isn’t the first automaker to move small car production out of the U.S. Mexico has become an auto production Mecca for new industry investment, surpassing Canada in annual automotive production.

Mexico’s automotive manufacturing boom strains suppliers, supply of workers

BMW has begun training Mexican workers as it builds a plant in San Luis Potosi. Ford plans to build a plant there, and General Motors has operations nearby.
BMW has begun training Mexican workers as it builds a plant in San Luis Potosi. Ford plans to build a plant there, and General Motors has operations nearby.

By Laurence Iliff / Automotive News

Oscar Albin pores over a slide presentation showing Mexico’s key advantages for the automotive supply sector. As executive president of the National Auto Parts Manufacturing Association, Albin is particularly proud of a few of them.

For starters, there are the manufacturing costs, which not only run 10 percent below costs in the U.S. but are below even China’s, according to the slide presentation, which cites sources ranging from government agencies and international consulting firms to the auto-parts group’s own data.

Then there are the free-trade agreements: 14 of them, covering 46 countries, said Albin, a mechanical engineer who spent 23 years at Chrysler de Mexico.

“We are at the center of the world,” said Albin, pointing to a graphic showing Mexico’s access to North America, South America, Europe and Asia. About 90 percent of the top 100 global suppliers have a local presence.

But life is not all wine and roses for the roughly 600 Tier 1 suppliers in Mexico that feed local plants and export to the U.S., among other nations.

Mexico’s fast growth as an export platform for light vehicles and strong demand for components worldwide is causing a shortage of qualified labor, Albin said, and it has quickly become the industry’s biggest challenge.