Ford Motor said on Tuesday that it would invest over $1.6 billion to build a new assembly plant in the city of San Luis Potosi, Mexico. The plant will build small cars, making it the most recent automaker to increase its presence south of the border.
The investment by Ford in Mexico will create over 2,800 jobs by the start of 2020, which delivers a huge blow to members of the UAW, which had pushed for higher wagers during its talks for a new contract with Ford last year.
Ford’s announcement comes amidst an election year where the leading candidate for the Republicans, Donald Trump has pressured Ford publicly to drop plans it has in Mexico for expansion.
Ford announced that it is committed to investing in the United States and for adding jobs across America even as it grows its presence inside Mexico as well.
Ford said the company had to make its decisions on a scale that was global since it competes globally, but wanted to be clear that the company is proud to be American and most of its investment happens within the borders of the U.S.
Ford said it has hired 25,000 workers across the U.S. over the last five years and produces more vehicles in the U.S. than in any other auto manufacturer.
In March, Trump said he was going to stop Ford from expanding in Mexico if elected president by threatening the company and other automakers that do so with a tariff of 35% on products or parts that are imported from Mexico into the United States.
Within a couple of days, Ford would call him and say Mr. President the company has decided to build a new plant in the U.S.
Since then Mark Fields the CEO at Ford has said repeatedly that the automaker remained committed to investing within the U.S. but was not going to alter its plans of expanding in Mexico.
Today, Ford says the Mexico investment would not mean any lost jobs inside the U.S.
In fact, Ford said it committed last November to invest over $9 billion in plants across the U.S. and to create or keep over 8,500 jobs as part of its new contract of 4-years with the UAW.