Will Ford’s decision to build the Focus in China and export them to the US go under the radar like similar decisions to shift manufacturing jobs overseas while Barack Obama was President? Will President Trump allow the production of the Ford Focus to move to China without a fight? Even if they don’t agree with him on everything, most Americans are aware of how hard President Trump is working to keep and grow manufacturing here in the United States. Ford’s decision will likely not go over well with the American consumer…
Ford will export the next-generation Focus compact car from China to North America in 2019, rather than from Mexico as earlier planned, saving the company $500 million, a top executive said on Tuesday.
It is the first major manufacturing investment decision made by new Chief Executive Officer Jim Hackett, who succeeded Mark Fields in late May.
Discussion about the small-car production shift from Mexico to China began ‘a couple months ago’ under Fields, said Joe Hinrichs, president of global operations.
In January, after U.S. President Donald Trump criticized Ford for shipping small-car manufacturing to Mexico, Ford said it would kill plans to build a $1.8-billion Focus plant in San Luis Potosi and instead produce the new Focus at an existing plant in Hermosillo.
Although it is cheaper to build and ship cars to the United States from Mexico than China, ‘this was not a variable cost decision,’ Hinrichs said in a Tuesday morning briefing.
‘It allows us to free up a lot of capital’ because Ford now has to retool only one plant – the existing Focus factory in Chongqing – rather than two to supply North America.
Given dwindling overall U.S. demand for small cars such as the Focus, ‘we thought this was the best balance of that cost/capital tradeoff,’ Hinrichs said.
He said Ford planned to inform the White House Tuesday.
Asked if Ford was concerned about having to pay a border tax, as Trump has threatened on vehicle imports from Mexico, Hinrichs said ‘the capital saving outweighs the risk’ of a potential tax on the Chinese-built Focus.
Ford stock fell 0.8 percent at $11.15.
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