Ford Motor Co.’s ongoing war of words with Republican Presidential candidate Donald Trump continued today after the businessman-turned-politician suggested the automaker was looking to get rid of all of its U.S. manufacturing employees.
Trump who has repeatedly threated to slap a 35% tariff on any Ford products built and shipped from Mexico to the United States for sale, told a Detroit-area television station that the automaker was looking to get out of the U.S.
“Basically when they make their car, and they think they’re going to get away with this, and they fire all of their employees in the United States; they move to Mexico,” Trump told Fox News Detroit.
“When that car comes back across the border into our country that now comes in free, we’re going to charge them a 35% tax. And you know what’s going to happen? They’re never going to leave.”
(Ford moving all small car production to Mexico. For more, Click Here.)
Ford was quick to respond. Spokeswoman Christin Baker told the Detroit News in an email: “Ford has been in the United States for more than 100 years. Our home is here. We will be here forever.”
The Dearborn, Michigan-based automaker repeatedly said that the move of the Focus and C-Max small cars to Mexico would be offset by the introduction of new vehicles into that Michigan plant, including a new Ford Ranger midsize pickup as well as potentially the Bronco sport-ute, which hasn’t been confirmed.
Since 2011, Ford has invested $12 billion in U.S. plants and created 28,000 U.S. jobs. Trade and legal analysts said there is no clear mechanism that would allow a president to take such steps. And Trump’s critics questioned why the candidate focused on Ford and not the numerous other automakers moving to Mexico.
Ford previously said it would invest $1.6 billion in its Mexican operations. It is not clear if — barring some new roadblocks – that figure will now grow.
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Mexico offers a number of advantages for automakers trying to cut production costs on traditionally low-profit small cars. That country’s modest labor rates are a key factor. But Mexico also offers the opportunity to boost exports. It has negotiated more free trade agreements than any other country but Israel.
Ford is by no means the only automaker employing this production strategy. ”It’s something happening generally. It makes sense to build your higher profit models in your higher-cost plants,” said Stephanie Brinley, a senior analyst with IHS Automotive.
Fiat Chrysler CEO Sergio Marchionne recently announced that the maker will end production of all passenger cars in the U.S. The maker is currently negotiating a new contract with Canadian auto workers and it may yet lay out similar plans North of the border. FCA is looking to drop many smaller models entirely, notably its compact Dodge Dart and Chrysler 200 sedans.
(To see more about Ford plowing $1.6 billion into its Mexico plant, Click Here.)
General Motors is also rethinking its small car strategy for the U.S. and foreign-owned makers are also looking at options, especially as they boost their own production presence in Mexico.