Steel Markets

Ford Cancels Mexican Plant to Invest in EV Production in the US

Written by Sandy Williams

Ford Motor Company announced today that it is canceling plans to build a new plant in San Luis Potosi, Mexico and will invest in electrical vehicle production in the U.S. About half of the $1.6 billion that was designated for the Mexican plant will be used instead to expand the Flat Rock Assembly Plant in Michigan.

Ford says it will invest $700 million at Flat Rock to build high-tech autonomous and electric vehicles along with the Mustang and Lincoln Continental. The expansion is expected to create 700 direct new jobs.

“As more and more consumers around the world become interested in electrified vehicles, Ford is committed to being a leader in providing consumers with a broad range of electrified vehicles, services and solutions that make people’s lives better,” said Mark Fields, Ford president and CEO. “Our investments and expanding lineup reflect our view that global offerings of electrified vehicles will exceed gasoline-powered vehicles within the next 15 years.”

“I am thrilled that we have been able to secure additional UAW-Ford jobs for American workers,” said Jimmy Settles, UAW vice president, National Ford Department. “The men and women of Flat Rock Assembly have shown a great commitment to manufacturing quality products, and we look forward to their continued success with a new generation of high-tech vehicles.”

Seven electrified vehicles were announced by Ford today:

•An all-new fully electric small SUV, coming by 2020, engineered to deliver an estimated range of at least 300 miles, to be built at the Flat Rock plant and sold in North America, Europe and Asia

•A high-volume autonomous vehicle designed for commercial ride hailing or ride sharing, starting in North America. The hybrid vehicle will debut in 2021 and will be built at the Flat Rock plant

•A hybrid version of the best-selling F-150 pickup available by 2020 and sold in North America and the Middle East. The F-150 Hybrid, built at Ford’s Dearborn Truck Plant, will offer powerful towing and payload capacity and operate as a mobile generator

•A hybrid version of the iconic Mustang that will deliver V8 power and even more low-end torque. The Mustang Hybrid, built at the Flat Rock Plant, debuts in 2020 and will be available in the North America to start

•A Transit Custom plug-in hybrid available in 2019 in Europe engineered to help reduce operating costs in even the most congested streets

•Two new, pursuit-rated hybrid police vehicles. One of the two new hybrid police vehicles will be built in Chicago, and both will be upfitted with their police gear at Ford’s dedicated police vehicle modification center in Chicago

Ford’s new lineup will be the company’s first hybrids to use EcoBoost instead of naturally aspirated engines. The technology improves performance and fuel economy.

New technology on the way

Ford will begin testing its new EV technology in Europe with the Transit Custom plug-in hybrid. In the U.S. a fleet of Transit Connect hybrid taxi and van prototypes are being tested in New York and other major cities.

Ford is also working with automakers in Europe to create an ultra-fast charging network to service electric vehicles. Initially, Europe will have 400 charging sites that will expand into the thousands by 2020, said Ford.

The technology will include wireless charging in the U.S. and Europe that extends the range for short distance commuters when they pull into a charging parking spot.

Why now?

Ford has sold more than 520,000 electrified vehicles in North American since 2005 and 560,000 globally. A study of 33,000 Ford EV owners show an overwhelming number of EV car customers say they will replace their current EV with a new one—92 percent of battery electric car customers and 87 percent of plug-in hybrid customers.

The decision to cancel the Mexican plant was due to changing market conditions and the new pro-business climate, said CEO Mark Fields during a press interview today. Ford was heavily criticized by Trump during the presidential campaign.

“We look at all the factors, and our view is we see a more positive U.S. manufacturing business environment under President-elect Trump and the pro-growth policies and proposals that he is talking about, so this is a vote of confidence for President-elect Trump and some of the policies that they may be pursuing,” Fields said.

Ford says it will continue plans to produce its next generation Focus in Mexico at the existing plant in Hermosillo.

The announcement by Ford came on the same day that President-elect Donald Trump was tweeting criticism at General Motors for their production of the Chevy Cruze in Mexico.

Trump tweeted this morning, “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A. or pay big border tax!”

Two hours later, General Motors issued a statement clarifying its production of the Chevy Cruze.

“General Motors manufactures the Chevrolet Cruze sedan in Lordstown, Ohio,” wrote Pat Morrisey, GM New Relations. “All Chevrolet Cruze sedans sold in the U.S. are built in GM’s assembly plant in Lordstown, Ohio. GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S.”

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