Ford to Cancel Mexican Plant - Invest $700mm in Michigan Plant

[General Ike]

Looks like Ford is going to cancel its $1.6billion plan in Mexico and invest $700million in an existing Michigan plant and create several hundred jobs instead.  CEO sites Trump's pro business policies as a major factor in the decision.  

 

http://www.foxnews.com/politics/2017/01/03/ford-to-scrap-mexico-plant-invest-in-michigan-due-to-trump-policies.html

[gicknordon]

What that article fails to mention is that they will still be moving the focus and cmax to mexico, it will just be at an existing plant rather than a new one.

Edited January 3, 2017 by gicknordon

[kscarbel2]

In effect, nothing has changed. Ford is still going to shift production of the Focus and C-Max from Wayne, Michigan to Mexico. It will now be built in an existing plant at Hermosillo rather than a new $1.6bn plant in San Luis Potosi.

No Trump success story here. High volume light vehicles for the world’s second largest market should all be built in the United States, to the benefit of “our” country’s economy.

Trump has threatened to slap Ford with a 35 percent tariff on any vehicles it imports from Mexico. Now Ford is still going to produce the cars in Mexico, as planned, to the benefit of Mexico’s economy, and you can safely bet that Ford will never be forced to pay a 35 percent tariff to import the cars into the United States.

Rather than build the new Mexican plant, Ford said it would now invest some of that $1.6bn sum in Flat Rock, creating 700 jobs building a range of electric cars. In fact, the Flat Rock investment was already planned several years ago.

Wayne is still expected to produce the global Ford Ranger and an SUV based on the Ford Everest, allegedly safeguarding 3,500 US jobs.

------------------------------------------------------------------------------------------------

Ford, following Trump criticism, cancels plans for $1.6 billion Mexico plant

Automotive News  /  January 3, 2017

Ford Motor Co., following months of withering criticism from President-elect Donald Trump for expanding operations in Mexico, said today it will cancel its $1.6 billion assembly plant in the early stages of construction in Mexico, instead investing $700 million in Michigan to bring to market autonomous and electrified vehicles.

Ford planned to build its Focus sedan in the new plant following 2018, but will instead build it at an existing Mexico plant in Hermosillo. The $700 million investment will help transform Ford’s Flat Rock Assembly Plant, which currently builds the Mustang and Lincoln Continental, into a high-tech hub capable of building a yet-to-be-determined autonomous hybrid and fully electric SUV with a 300-mile electric range.

Those new vehicles are among seven new electrified vehicles Ford detailed today, including hybrid versions of its F-150 and Mustang. (Ford is two years behind its competitors in hydrid and electric vehicle design)

The reversal, which came less than a year after Ford announced construction of the new plant, was hailed by lawmakers Tuesday, while Mexican officials expressed disappointment and vowed to make Ford pay back any money spent on the now-canceled plant site.

Ford CEO Mark Fields called the decision a “vote of confidence” in Trump and his pro-growth policies, although he told CNBC “the main reason for not building and canceling the plant is just due to market demand.”

“We’ve made this decision independently on what’s right for Ford, but we look at all the factors,” Fields told reporters at the announcement. “Our view, we see a more positive U.S. manufacturing business environment under President-elect Trump and the pro-growth policies and proposals he’s talking about.”

Ford in December 2015 announced plans to invest $4.5 billion in electric car research and add 13 electrified vehicles to its lineup by 2020. Today it announced details about seven of the 13.

The new fully electric small SUV will be coming by 2020 and will be built south of Detroit in Flat Rock, Michigan. It, alongside a high-volume autonomous hybrid and the hybrid version of the Mustang, will be built in Flat Rock. A Transit Custom plug-in hybrid, available in 2019, will be built in Europe; and two new pursuit-rated hybrid police vehicles will be built in Chicago.

To support this, Ford plans to invest $700 million and add 700 direct new jobs in Flat Rock over the next four years. Part of that money will go to create a new Manufacturing Innovation Center in Flat Rock. Fields said the plant will become “one of the world’s most flexible and high-tech manufacturing centers."

Michigan Gov. Rick Snyder, in a statement, cited the state’s push to become a national leader in mobility. He thanked Ford for its “continued confidence in our state and our people.”

UAW-Ford Vice President Jimmy Settles called the investment “the equivalent of a new assembly plant.”

Settles said that an unspecified number of UAW workers will move from temporary status to full-time. He expects Ford to add a third shift to Flat Rock.

"It’s very significant," Settles said. "I’ve seen a lot, many peaks and valleys. This is at the top, because I know what it will mean for people at this plant and also in America."

Settles said Ford chose to make its investments in Flat Rock for a combination of reasons.

“It’s had very successful launches of the Mustang and Continental, and they have acreage here and they’re not at full capacity,” he said. 

Hiring for the 700 new jobs will begin in 2018, Fields said.

Fields said Ford was “encouraged” by “pro-growth policies” Trump and the new Republican Congress are likely to pursue, citing them as one of several factors in the company’s decision to invest in the U.S. and cancel the Mexico plant.

“We believe that these tax and regulatory reforms are critically important to boost U.S. competitiveness and of course drive a resurgence in American manufacturing and high-tech innovation,” Fields said.

Fields cited changing market demands and slower sales of small cars as the decision to keep the Focus in Mexico.

Trump has threatened to slap Ford with a 35 percent tariff on any vehicles it imports from Mexico, as well as renegotiate or pull out of the North America Free Trade Agreement (NAFTA).

“Obviously, there was some disappointment [in Mexico],” Fields said. “But we’ve been in Mexico over 90 years, and we’re moving our Focus down to Hermosillo, so we’ll be safeguarding the 2,900 [Mexican] jobs that are there, plus we’ll probably add about 200 jobs when we add Focus there.”

Mexico’s Economy Ministry said it regretted Ford’s decision to pull its investment from San Luis Potosi. The federal government has guaranteed that the automaker will reimburse the state government for its expenses on the project, the ministry said in a statement. It made no mention of Trump.

“The growth of Ford Motor Company in North America, and particularly in Mexico, has been the result of a strategy of competitiveness based on global value chains in which North America competes with other regions of the world,” the ministry said. “The jobs generated in Mexico have contributed to maintaining manufacturing jobs in the United States [BS] that otherwise would have disappeared due to Asian competition.”

The now-canceled plant was supposed to employ about 2,800 workers, Ford said when it announced the news. Fields said ground-clearing at the site began around May, but a spokeswoman said no actual construction had taken place.

“Where we’re at in the construction of the plant, any assets -- and there aren’t many -- can be redeployed throughout the Ford system,” Fields said.

It’s unclear how much Ford is investing in Hermosillo to add the 200 workers to build the Focus.

[kscarbel2]

Trump threatens 'big border tax' on GM over Chevy Cruze production

Automotive News  /  January 3, 2017

President-elect Donald Trump today blasted General Motors and threatened to impose a "big border tax" for making its Chevy Cruze model in Mexico. However, the automaker reiterated that Cruzes built there will mostly go to the domestic market and that it will continue to build the compact in the U.S.

"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!" Trump said in a post this morning on Twitter.

GM responded in a statement: "General Motors manufacturers the Chevrolet Cruze sedan in Lordstown, Ohio. 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."

In March, the automaker said it would invest $350 million to produce the next-generation Cruze at its plant in Coahuila, as part of $5 billion investment in its Mexican plants announced in 2014. At the time, GM said it will continue manufacturing the Cruze in Lordstown.

However, with demand for the Cruze sedan waning, GM announced in November that the Lordstown, Ohio, plant will lose its third shift on Jan. 23. The cutback affects 1,202 hourly and 43 salaried jobs. Through the first 11 months of 2016, Cruze sales were down 18 percent.

Mexico Cruze production began last year; 52,631 models were built vs. 319, 536 in the U.S. Prior to GM's March announcement, the Cruze had been imported to Mexico from the company's plant in South Korea.

[david wild]

Obama or Clinton didn't do it, Trump did. Action not inaction. Thank you Ford and Trump. 

[TeamsterGrrrl]

Trump didn't do crap- GM long ago built Cruzes in Mexico and occasionally sends a few to the U.S. when Lordstown can't meet the demand. Ford is still moving the Focus to Mexico, I suspect they're cancelling the new plant in Mexico in response to dwindling demand for small cars. If anything, adding electrics and hybrids to Flat Rock is Ford thumbing their nose at Trump... Creating more american jobs by building efficient cars and trucks that Trump hates!

[Red Horse]

Agree-bottom line IMO is it is good news for US workers.       When 1.6 billion DOESN'T get built in Mexico, that is good news for the US economy.  If nothing else, it is one less option Ford will have in the future when it comes to sourcing decisions.  Better to have spent 700 mil in US than 1.6 billion in Mexico.  And one thing that is consistent- Ford has said they can't profitably build a low 20 grand vehicle in US.. You can bet these new vehicles will have an average transaction price well north of 20 grand.

[kscarbel2]

How Ford finally turned the Trump tide on GM

Nick Bunkley, Automotive News  /  January 3, 2017

For a year and a half now, Donald Trump has made Ford Motor Co. his automotive punching bag, while General Motors, following the conventional advice for encountering a grizzly bear, tried not to make any sudden movements that might attract his attention.

Both companies have been investing heavily in Mexico, but Trump kept singling out Ford in his attacks, which consisted more of rhetoric to incite the crowds at his rallies than actual facts.

In one day, Ford managed to flip the narrative. Suddenly, Ford has become the American automaker investing in America, while GM is printing up layoff notices that will go out to 2,000 workers in Michigan and Ohio just as Trump is taking office.

Ford, after insisting throughout the presidential campaign that its plans for Mexico were set in stone, has now handed Trump two gift-wrapped victories since the election. First was the reversal of plans to move Lincoln MKC production out of Kentucky. Now it canceled an entire $1.6 billion plant, choosing to spend less than half that amount in Michigan instead.

And hours before announcing that stunning turn of events, Ford scored a victory for itself when Trump tweeted an attack on its archrival. Trump told his millions of followers that GM was importing Mexican-made Chevrolet Cruzes and threatened a “big border tax” if it didn’t start making them in the U.S. instead.

The timing was clearly no coincidence.

Trump aide Kellyanne Conway, appearing on CNBC this morning, said the tweet related to “secret information” that Trump had received.

And the fact that Trump picked on the Cruze was curious. If he simply wanted to attack GM for importing vehicles from Mexico, why not point out that Chevy sold about 80,000 of its Mexican-made Trax crossovers in the U.S. last year?

In contrast, only about 4,500 of the Cruzes sold last year in the U.S. were built in Mexico. GM started importing the Cruze hatchback about five months ago, because demand for it isn’t strong enough to justify installing the tooling for it in Lordstown, Ohio, where the Cruze sedan is produced. The Mexican-built hatches are sold in a number of countries, including the U.S.

Through November, GM had made 319,536 Cruze sedans in Ohio last year. All of the Cruze sedans sold in the U.S. since the nameplate’s 2010 debut have been made in Ohio.

But the Cruze was ripe for an attack because inventories of them have swelled to the point that GM is cutting the third shift in Lordstown on Jan. 23 -- three days after Trump’s inauguration. It’s easy to make the case that GM is up to something nefarious when it’s cutting American jobs at the same time as imports of the car those workers build are increasing.

The truth is that GM can’t just move hatchback production to Ohio at the drop of a hat. With volumes of fewer than 1,000 a month so far, it would make more sense to just stop offering the car than to spend the extra money to build it in Lordstown.

And the fact is, Ford still plans to move production of its Cruze competitor, the Focus, to Mexico in 2018. That hasn’t changed. It’s just going to make the car in an existing plant, alongside the Fusion and Lincoln MKZ, rather than build a new plant for that purpose.

Ford even says it will save money by canceling the San Luis Potosi plant, which was scheduled to open next year. It’s a win for the company as well as for Trump, who gets to claim credit for creating jobs even before he becomes president.

The investment that Ford is making in Michigan, adding 700 jobs here instead of 2,800 in Mexico, is certainly significant. UAW Vice President Jimmy Settles said he cried when told of the gains for his membership.

But the biggest result of Ford’s flip flop is a greater potential for Trump to bully other automakers into similar moves.

[General Ike]

Keep drinking the koolaid.  Somehow people find a way to turn something positive into a negative.  Fact of the matter is two days ago, a major US automaker had plans to spend 1.6b in Mexico and do nothing in the states.  Now, they're not spending the money in Mexico and they are going to spend 700mm in Michigan and add/save 700 jobs.  This is a good thing.  Regardless if production of certain vehicles happens elsewhere.  

This is a good thing and anyone who chooses to try and paint it in any other light is simply being negative. (Edited at another members suggestion)

[kscarbel2]

7 hours ago, General Ike said:

Keep drinking the koolaid.  Somehow people find a way to turn something positive into a negative.  Fact of the matter is two days ago, a major US automaker had plans to spend 1.6b in Mexico and do nothing in the states.  Now, they're not spending the money in Mexico and they are going to spend 700mm in Michigan and add/save 700 jobs.  This is a good thing.  Regardless if production of certain vehicles happens elsewhere.  

This is a good thing and anyone who chooses to try and paint it in any other light is nothing short of an idiot.

My friend, you typically bring some very interesting views to the table,

However, in the interest of healthy discussions among friends, i.e. your fellow BMT members, and also in the interest of having an atmosphere where people aren't afraid to share their thoughts, which diminishes the growth of the BMT website, may I humbly and respectfully suggest we all refrain from calling others............"idiots".

[TS7]

Flat Rock Plant is south of Detroit in Wayne County. I did site work for 2 new home subdivision sites 4 miles from there in 2002 thur 2006. The builders there have not sold a new home in these sites since 2007. Most of the sales at that time were to Ford workers. The owner of the sites told me to look at doing some prep work for a phase 2 of one of the sites. That area has been dead for 10 years. That never was going to happen the way things have been the last 8 years. That is why I voted for Trump.  

[General Ike]

8 minutes ago, kscarbel2 said:

My friend, you typically bring some very interesting views to the table,
However, in the interest of healthy discussions among friends, i.e. your fellow BMT members, and also in the interest of having an atmosphere where people aren't afraid to share their thoughts, which diminishes the growth of the BMT website, may I humbly and respectfully suggest we all refrain from calling others............"idiots".

Point taken. Edited.

 

[kscarbel2]

On Tuesday, September 14, 2016, Ford CEO Mark Fields said the automaker was going to shift Focus and C-Max production to Mexico.

Today, after the dust has settled, Focus and C-Max production is still being shifted to Mexico.

Ford’s Hermosillo plant produces the Fusion and slow selling Lincoln MKZ (a rebadged Fusion). The Fusion, the US market variant of the global market Mondeo, saw 265,840 U.S. sales in 2016, down from 300,170 in 2015. The lackluster Fusion/Mondeo-based MKZ saw just 30,534 U.S. sales (Resuscitated Lincoln will not succeed, but that’s another story)

Now, Ford will spend money to expand its existing Hermosillo plant so as to accommodate Focus/C-Max production (Ford's mum on that), rather than build a separate new plant in San Luis Potosi.

It's all smoke and mirrors. Ford says they cancelled the plant. Trump can voice success. Focus/C-Max production shifts to Mexico as planned. Big business and Trump win, while U.S. job creation is nixed.

Ford would have had to hire more U.S. workers to build the Ranger, Bronco and electric/hybrid cars, as well as maintaining U.S. Focus/C-Max production. If Wayne continued to build the Focus/C-Max, Ford would have had to build a new factory in the U.S., stimulating the U.S. economy while adding to the tax base.

Light vehicles with high volume sales in the U.S. market, the world’s second largest, should all be built in the U.S., to the benefit of “our” country’s economy.

168,789 Focus cars were sold in the U.S. market in 2016. That volume should dictate U.S. production.

The equivalent of the VW Golf Sportsvan, the C-Max only saw 19,834 U.S. sales in 2016, due to poor promotion. Because the C-Max rides on the Focus platform, the C-Max must be produced alongside the Focus wherever that is.

[General Ike]

I'm just not sure how its smoke and mirrors.  The facts you state are the facts.  But the investment in the plant in Michigan brings 700 jobs with it and $700million in cap-ex spending which in and of itself will create jobs for those working on the $700million they're putting into the plant.

I just don't see why we're not looking at this as a positive.  The narrative that is being put forth is that its smoke and mirrors and that there is no good going on here.

Is the following not a better way to look at this.... "Ford has announced the cancellation its investment of $1.6billion into a new plant in Mexico and instead will invest $700million in a plant in Michigan where jobs are the economy desperately need it.  This change of direction will bring 700 jobs to the plant as well as stimulate other jobs as the facility is modified.  Ford will however shift the production of certain vehicles to Mexico in a bid to produce its lower end vehicles more efficiently.  While this is disappointing, Ford's reversal of its plan to produce a larger plant in Mexico that would almost assuredly result in a greater shift of production to Mexico in the future, is a step in the right direction for the American Worker, the State of Michigan and the American Economy."

[BillyT]

The whole issue makes my head hurt! On the subject of automotive production,Buick has built its compact luxury suv in China since 2014 where it has done well,130000units sold! This year it is being sold in America! I have read two road tests both rate it poorly!The bottom line is to my knowledge it is the first American branded vehicle built in China!! Sold here! We as Americans face a situation where you cannot buy a power tool,except a couple under 50.00 made here,including high end tools like Milwaukee and Rockwell,Or quality German or Japanese tools like Bosch and Makita not made in China! Virtually all electronics and small household items are assumed to be made in China! The multimillion dollar cranes to update Tampa Bay harbor( to accommodate bigger Chinese container ships) were made in China! The  only relatively high dollar products not made in China are cars! You can buy a reliable,economical car built here from Japan,Germany and I think Sweden,and of course the big three American makers! WHO would buy a poorly rated, overpriced car built by exploited workers in a polluted country with all kinds of human rights violations?where is the outrage?! Admittedly in the seventies thru early nineties the Japanese were building more reliable cars than we were! The big three finally woke up and US built cars are as good as any! The car in question is the Buick Envision,and if we buy any significant number of them I guarantee they'll all eventually be built there! GM has proven they have no respect for the American consumer or they wouldn't even TRY to sell a car here made in China!

[kscarbel2]

Nikkei Asian Review  /  January 6, 2016

American President-elect Donald Trump challenged Toyota Motor on Twitter Thursday, writing that there was "NO WAY" the Japanese automaker could export its Corolla cars to the U.S. from a planned Mexican plant without a "big border tax."

“Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax,” Trump wrote

Toyota CEO Akio Toyoda said Thursday that having established a plant in the region [Mexico] already, the company bore "responsibility for employment and local society" there, and indicated that he had no intention to change plans at present. The new plant is expected to begin production in 2019. Trump's message appears to have been in response to Toyoda's statement.

Japanese automaker Honda likewise shows no signs of backing away from producing cars in Mexico.

--------------------------------------------------------------------------------------------------

Donald Trump just threatened Toyota — but it looks like he got the facts wrong

The Washington Post  /  January 5, 2016

President-elect Donald Trump continued his Twitter tirade against the auto industry on Thursday, slamming Toyota for investing in Mexico but appearing to misstate key details of the company’s operations.

Trump warned Toyota it could face hefty fines for building a plant in Baja, Mexico, to sell the popular Corolla sedan to American consumers. But Trump’s tweet looks to be incorrect: Toyota’s factory in Baja assembles Tacoma trucks. A new plant in Guanajuato, Mexico, will manufacture Corollas.

(Wall Street Journal: The new plant, announced in April 2015, will produce around 200,000 Corolla compact cars a year for the North American market starting in 2019. Production of the Corolla will move from Cambridge, Ontario to the new plant in Mexico, although Corolla cars will continue to be built at Toyota’s plant in Mississippi. The Corolla is the second-best-selling compact car in the U.S. behind the Honda Civic, with Toyota delivering 360,000 in 2016.)

(Automotive News: Toyota will continue to build the Corolla at its Blue Springs, Mississippi plant, which built 170,177 vehicles in the first 11 months of 2016. Toyota sold 360,483 Corollas in the U.S. last year, meaning Toyota would need to more than double its U.S. Corolla production capacity to maintain current sales level in the U.S. alone. Doing so would go against the plans to shift much of its car production to low-cost Mexico while building high-margin pickups, crossovers and SUVs in the higher-cost U.S.)

That factory broke ground in November, and production is expected to begin in 2019. The work is being shifted to the plant from a facility in Canada. Toyota said Thursday that there is no change in employment and production in the United States as a result of the new operations.

“Toyota has been part of the cultural fabric in the U.S. for nearly 60 years,” Toyota said. “Toyota looks forward to collaborating with the Trump administration to serve in the best interests of consumers and the automotive industry.”

This is the first time that Trump has warned that a foreign company could face similar repercussions.

There is debate over whether Trump could unilaterally fulfill his campaign promises to levy blanket double-digit tariffs on imports from Mexico and China. Generally, that authority lies with Congress, and House Speaker Paul D. Ryan (R-Wis.) opposes such measures.

“No, we’re not going to be raising tariffs,” he said on Wednesday. “We think tax reform is the better way of addressing imbalances, leveling the playing field without starting trade wars, without having the adverse effects that you get with protectionism or trade wars.”

Trump’s tweet came shortly after Toyota Motor President Akio Toyoda said his company is “oriented in the same direction” as the United States. Toyota has invested nearly $22 billion into its U.S. operations and employs about 136,000 workers.

[kscarbel2]

Exported Mexican car production to the U.S. and Canada

January thru November 2016

General Motors                                   495,790 units

Nissan Motor Co.                                464,877

Fiat Chrysler Automobiles (FCA)        404,160

Ford                                                     351,691

Toyota                                                 124,439  (up 37% from the year-earlier period, but well behind other automakers)

[TeamsterGrrrl]

Nice to see the electoral college's president Trump protecting Canadian auto workers from Mexican auto workers (LOL)!

[BillyT]

S.O.B,! My wife's 2012 Corolla was built  in Canada and Its powertrain was built in America! While Of course I'd prefer it was built in America, I felt this was a decent compromise!as both countries use UMW workers,Canada is more oriented to organized labor than we are! They turned down deregulation,which destroyed the trucking industry in America! Mexico is a corrupt country where Wal Mart. Admitted to paying bribes to get their stores built! Canada has been our ally for decades,many of them died in ww11! Seems like what little we gained with Carrier and Ford is offset by cars and other products built in Mexico! GM sent its Delco battery plant from Ontario to Mexico decades ago! Ill bet the folks at the Oakville Ontario Ford truck plant are holding their breath! I was always treated well there!

[BillyT]

Of course POS right to work Ryan opposes any measures against companies offspring, he probably talked Milwaukee power tools into going to China! How dare they call their tools Milwaukee,should call them Beijing!lol did I spell that right?

[kscarbel2]

On 1/4/2017 at 7:48 AM, kscarbel2 said:

Trump threatens 'big border tax' on GM over Chevy Cruze production

Automotive News  /  January 3, 2017

President-elect Donald Trump today blasted General Motors and threatened to impose a "big border tax" for making its Chevy Cruze model in Mexico. However, the automaker reiterated that Cruzes built there will mostly go to the domestic market and that it will continue to build the compact in the U.S.

"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!" Trump said in a post this morning on Twitter.

GM responded in a statement: "General Motors manufacturers the Chevrolet Cruze sedan in Lordstown, Ohio. 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."

In March, the automaker said it would invest $350 million to produce the next-generation Cruze at its plant in Coahuila, as part of $5 billion investment in its Mexican plants announced in 2014. At the time, GM said it will continue manufacturing the Cruze in Lordstown.

However, with demand for the Cruze sedan waning, GM announced in November that the Lordstown, Ohio, plant will lose its third shift on Jan. 23. The cutback affects 1,202 hourly and 43 salaried jobs. Through the first 11 months of 2016, Cruze sales were down 18 percent.

Mexico Cruze production began last year; 52,631 models were built vs. 319, 536 in the U.S. Prior to GM's March announcement, the Cruze had been imported to Mexico from the company's plant in South Korea.

Car & Driver  /  January 6, 2017

President-elect Donald Trump took to Twitter earlier this week to bash General Motors for importing Chevrolet Cruze compact cars to the United States from one of its plants in Mexico.

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!

— Donald J. Trump (@realDonaldTrump) January 3, 2017

The tweet prompted the automaker to issue the following brief statement, which is included here in its entirety:

General Motors manufactures the Chevrolet Cruze sedan in Lordstown, Ohio. 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.

It all seemed like much ado about very little, what with Trump’s track record of not quite getting all his facts straight regarding automakers’ manufacturing sites and importation plans, and GM saying that it shipped just 4500 four-door hatchbacks to the United States among the 188,876 Cruzes it delivered to dealers last year.

But then, curiously, it turns out that there actually are several brand-new Mexico-made 2017 Chevrolet Cruze sedans for sale on U.S. dealer lots.

In addition, that number won’t be quite as low as 4500 this year; the hatchback only just went on sale here in fall 2016, and a full year of sales could mean that as many as 10,000 to 15,000 Cruze hatchbacks will be imported from Mexico.

GM has confirmed to Car and Driver that it will continue to source U.S.-market hatchbacks from its Ramos Arizpe, Mexico, plant for the foreseeable future. “So long as there’s customer demand, we’ll keep making them [in Mexico] for the U.S. market,” Pat Morrissey, GM’s corporate news relations director, told us. 

It was another Twitter user, automotive writer Edward Niedermeyer, who first reported on the Mexican Cruze sedans, noting that the Vehicle Identification Numbers (VINs) of many examples listed for sale across the country clearly indicate they were “Hecho en Mexico,

All you have to do to prove that GM lied to the President Elect is to find Chevrolet Cruze Sedans for sale in the US with 3G1 VINs.

When reached by Car and Driver for comment, GM’s Morrissey confirmed that the automaker had indeed imported some Cruze sedans from Mexico: about 8400 units from September through November, which, he said, was done to satisfy demand during the fall launch of the 2017 model. GM announced this launch strategy back in June. “We were very clear about that, very transparent about it,” Morrissey said. One of our editors visited a Chevrolet dealer near his home in Portland, Oregon, on Thursday and noted some Mexico-made Cruze sedans on that lot, where a sales manager confirmed that those examples had been sitting unsold for quite some time.

Morrissey added that GM’s January 3 statement was addressing vehicles that are being built at present. He said the automaker currently is assembling all Cruze sedans in the United States for sale here. “The fact that there are vehicles on dealer lots—those were vehicles supportive of the launch in the fall,” he said. Mexican leftovers, essentially.

Sourcing additional Cruze sedans from the Mexico plant is unlikely to happen, both because of the current political climate—who wants to risk inciting another tweetstorm?—and because demand for cars in general has been falling.

Indeed, GM announced in November that more than 1200 workers at its Lordstown, Ohio, complex will be laid off as the plant goes from three shifts to two and that the 188,876 Cruzes sold in the United States in 2016 represent a 17 percent year-over-year sales decline. (To be fair, 2016 was a transitional year that included winding down production of the old model and ramping up the new one, which can suppress sales numbers.)

The saga may not be over, however. GM’s Ramos Arizpe plant is set to begin supplemental overflow production of the new Chevrolet Equinox compact crossover in May and the new GMC Terrain at an unspecified date this year, according to Automotive News.

[kscarbel2]

BBC  /  January 9, 2016

BMW is spending $1 billion on a plant in Mexico.

BMW sales and marketing director Ian Robertson told the BBC that the firm was "absolutely" committed its new plant in San Luis Potosi, which will make its 3 Series cars for sale across North America.

He added that the company was investing $1 billion in its plant in South Carolina and pointed out that BMW was the biggest exporter of cars, in terms of value, from the US.

"I don't think there's any discussion that BMW is not at home in the United States. Yes we are building a plant in Mexico. Yes we built a plant in Brazil last year. Yes we are building plants in other parts of the world as our capacity increases. But that's part of a normal strategic manufacturing direction," Robertson said.

[kscarbel2]

Bloomberg  /  January 9, 2017

General Motors may test President-elect Donald Trump’s patience with its new GMC Terrain when the SUV heads to U.S. dealers this year from a factory in Mexico.

GM currently makes Terrain and its Chevy Equinox stablemate at a plant in Ingersoll, Ontario.

Moving Terrain/Equinox production to Mexico instead of the U.S. is partly a response to hyper competition among automakers seeking an edge through lower production costs. The 2015 labor agreement with the United Auto Workers union boosted wages and benefits for thousands of younger U.S. employees who previously made much less than veteran factory hands.

Mexican autoworkers earn an average of $8.24 an hour in pay and benefits, compared with $46.35 an hour for those in the U.S. Canadian workers get similar compensation.

Duncan Aldred, vice president of global GMC sales and marketing, said GM is using existing plants that can handle the production volume.

“We have been planning this for a long time, and we’re using our existing footprint,” he said.

GM has a lot riding on the new Equinox and Terrain. Small SUVs are a booming segment of the market and a big moneymaker for the company, so when GM planned the new versions, it decided to increase output from one factory to three -- adding the vehicles at two existing facilities in Mexico, according to a GM spokesman. The move is GM’s bet that more inventory will mean more new buyers, as well as a play to make more on each sale.

Some of the added production in Mexico is earmarked for overseas. That’s partly because of Mexico’s 44 free-trade deals with other countries, which allow GM to export vehicles tariff-free to markets where it doesn’t have similar agreements, including Brazil, Colombia and the European Union.

In late 2014, GM announced it would invest $5 billion in new plants in Mexico by 2018, creating 5,600 jobs south of the border. The Equinox and Terrain facilities, which also make other models, are roughly $1 billion of that. In 2015, GM said it is investing $5.4 billion in plants in the U.S.

That same year, the UAW negotiated a four-year U.S. labor deal that gave veteran workers at GM, Ford and FCA two 3 percent raises and two cash payouts equal to 4 percent of their pay. Entry-level, or so-called Tier 2, workers -- who once started at less than $16 an hour and topped out at $20 -- now start at $17 and grow into the union’s traditional $29. Those at Ford and GM also get the top-flight health insurance of their

The Equinox and Terrain could be a bigger deal than the Chevy Cruze. GM delivered 242,000 Equinox models to U.S. buyers in 2016 and 88,000 Terrains -- all from the Canada plant.

Those SUVs aren’t cheap. The current Terrain starts at $24,000, and GMC offers an upscale Denali edition that starts at $34,000. GMC is a luxury brand, which Dziczek said makes sense for production in Mexico.

“Mexican plants make small cars and luxury vehicles,” she said, “both of which have export potential.”

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Bill Ford: Scrapping Mexico Plant Is a Business Decision

Bloomberg  /  January 10, 2017

Ford Chairman Bill Ford discusses the Detroit auto industry, Donald Trump’s trade policies, the president-elect’s nomination of Elaine Chao for Transportation secretary and the company’s decision to scrap plans for a new plant in Mexico. He speaks with David Westin on “Bloomberg Markets” from the North American International Auto Show in Detroit, Michigan.

Video - https://www.bloomberg.com/news/videos/2017-01-09/bill-ford-scrapping-mexico-plant-is-a-business-decision

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Auto executives, with eye on Trump, highlight U.S. investments

Reuters  /  January 9, 2017

Global auto executives at the Detroit auto show are highlighting their investments in the United States, mindful of President-elect Donald Trump's attacks on automakers for building vehicles in Mexico.

Fiat Chrysler Automobiles CEO Sergio Marchionne said on Monday that uncertainty over Trump's trade and tax policies could lead automakers to delay investments in Mexico, and he confirmed plans to create 2,000 jobs at Fiat Chrysler's U.S. factories.

"The reality is the Mexican automotive industry has now for a number of years been tooled-up to try and deal with the U.S. market. If the U.S. market were not to be there, the reasons for its existence are on the line," said Marchionne.

FCA announced on Sunday it would spend $1 billion to retool factories in Ohio and Michigan to build new Jeep sport utility vehicles, as well as a pickup truck, and potentially move production of a Ram heavy-duty pickup truck to Michigan from Mexico.

On Monday, Ford confirmed it would build a new Ranger pickup and a new SUV under the storied Bronco name in Wayne, Michigan (replacing Focus/C-Max production that is shifting to Hermosillo, Mexico). During the 2016 presidential campaign, Trump criticized Ford's announcement last year that it would move Focus production to Mexico.

Last week, Ford scrapped plans to build a new $1.6-billion Focus plant in San Luis Potosi, Mexico, and said it would invest $700 million at its Flat Rock plant in Michigan.

Executives at Ford, Fiat Chrysler and other automakers at the auto show all claimed their investment decisions were driven by business considerations, not Trump's comments.

Most major automakers in the U.S. market have substantial vehicle-making operations in Mexico, as well as complex networks of parts makers that supply their factories in the United States and support jobs and investment in states such as Ohio and Michigan.

Trump praised Ford and Fiat Chrysler's latest announcements on his Twitter account on Monday.

"It's finally happening - Fiat Chrysler just announced plans to invest $1BILLION in Michigan and Ohio plants, adding 2000 jobs," Trump said. He added: "Ford said last week that it will expand in Michigan and U.S. instead of building a BILLION dollar plant in Mexico. Thank you Ford & Fiat Chrysler."

INVESTING IN THE UNITED STATES

Trump's focus on U.S. automotive jobs, and uncertainty over what policies he may introduce, have been central topics of discussions among industry officials at the annual auto show. Companies ranging from General Motors to Honda to Daimler used the show to highlight new U.S. investments.

Toyota will invest $10 billion in the United States over the next five years, the same as in the previous five years, North America Chief Executive Jim Lentz said Monday.

Honda will build a new hybrid model that does not have a gasoline counterpart in its lineup. The hybrid will be made in the United States in 2018 at an existing plant, and Honda said it would boost investment at its transmission plant in Georgia.

Daimler CEO Dieter Zetsche said Sunday the German automaker planned to invest another $1.3 billion to expand SUV production at its Alabama plant.

Volkswagen plans to invest $7 billion in the United States between 2015 and 2019. It is weighing whether to build an electric SUV in the United States or Mexico, said North America Region CEO Hinrich Woebcken on Sunday.

Volkswagen has had a plant in Mexico for 50 years and it is not shifting any jobs to Mexico from the United States.

"We do not make our investment decisions based on administrative cycles," Woebcken said.

FCA's Marchionne said Monday his company's decision to invest in expanded truck production in the United States "was in the works and has been in the works for a long period of time."

Marchionne wanted to get out the news about adding jobs and investment in the United States in case the company encountered more criticism from Trump.

Marchionne said he has not made a decision on whether to move production of certain Ram heavy-duty pickups from Mexico to the United States, in part because of uncertainty about tariffs.

"There's no commitment to move the heavy-duty. If tomorrow morning President-elect Trump decides to impose a border tax on anything that comes up from Mexico, then we’ll have to adjust."

Also on Monday, Toyota's Lentz warned that a "border adjustability tax," could add $1,000 to the cost of a Kentucky-built Camry sedan, because it has foreign-made parts.

Ford Chairman Bill Ford Jr and General Motors CEO Mary Barra have, separately, spoken with Trump in recent days.

Ford said he has been "in relatively frequent contact with him." He said he was encouraged that overhauling the corporate tax code was high on Trump's agenda.

Barra on Sunday said tax reform and "streamlining regulations ... are just two areas that would be extremely beneficial" for Trump to address.

Trump has criticized GM for building cars in Mexico while laying off workers in the United States. Barra, who is on an advisory committee to Trump, said decisions about where to build specific vehicles are made "two, three four years ago." Overall, she said of Trump, "we have much more in common" than areas of disagreement.

Marchionne said he had not spoken with Trump or anyone on the presidential transition team.