Southfield - Ford Motor is cancelling controversial plans to build the
Focus small car in Mexico,
saving $1 billion by ending North American production entirely and importing
the model mostly from China
after next year.
The US automaker will start making the next-generation Focus in China from the second half of 2019, a year after
output ends at one of its plants in Michigan.Ford’s savings will come from cancelling plans to assemble
the car at an existing factory in Mexico
and a decision made in January to abort construction of a plant in Mexico.
With its latest move, Ford has fully abandoned its strategy
of relocating small car production to Mexico that had been announced last
year by then-Chief Executive Officer Mark Fields.
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Fields was replaced as CEO last month by Jim Hackett, former
CEO of office-furniture maker Steelcase Inc. The company will be testing both
consumer appetite for China-built cars and the tolerance of President Donald
Trump, who has criticized automakers for importing vehicles from overseas.
“We’ve done a lot of research and consumers care a lot more
about the quality and the value than they do about the sourcing location,” Joe
Hinrichs, Ford’s president of global operations, said in a conference call with
reporters Tuesday. “iPhones are produced in China, for example, and people
don’t really talk about it.”
Ford said it’s also investing $900 million at its truck
factory in Kentucky
to build Expedition and Lincoln Navigator sport utility vehicles,
preserving 1 000 jobs.
After importing initial production of the new Focus cars
from China, Ford will ship
variants of the model later from Europe, the
company said.
The Michigan Assembly Plant now making the Focus will be
retooled to produce the Ranger midsize pickup in late 2018 and the Bronco
midsize SUV in 2020.
“China
gets a lot of attention, we’ll see how this plays out,” Hinrichs said in
response to a question about possible criticism of the move from Trump. “But we
believe this is a much better plan for our business globally.
And it frees up from
the original plan about $1 billion of capital that we can reinvest in the
business, including exciting things that we’re working on in autonomy and
electrification and a lot of that work is done right here in the US."
BLOOMBERG