Ford Scraps Plans For Mexico Plant In Surprise Move

In a surprise move, Ford said Tuesday it is scrapping plans to build a $1.6 billion small car assembly plant in Mexico after criticism from Donald Trump about its decision to build the plant.

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Ford Motor Company is scrapping plans to build a new car plant in Mexico. President-elect Donald Trump had repeatedly criticized the car company for moving production there. NPR's Sonari Glinton reports.

SONARI GLINTON, BYLINE: President-elect Donald Trump has singled out several individual companies. Ford, though, has come in for some special treatment. Trump threatened if Ford built the proposed plant in Mexico...

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DONALD TRUMP: Every car and every truck and every part manufactured in this plant that comes across the border - we're going to charge you a 35 percent tax, OK?

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GLINTON: That was in the summer. Ford and its CEO, Mark Fields, have repeatedly gotten into verbal sparring matches with the president-elect. In an interview today with NPR, Fields says business was the main factor in his decision making.

MARK FIELDS: Well, the main reason that we're canceling our $1.6 billion new plant in Mexico is essentially because we've seen market demand here in North America for small cars drop off pretty significantly.

GLINTON: I mean you've been essentially president-elect Donald Trump's whipping boy for quite some time, and it looks like politics to a casual observer.

FIELDS: Well, it could look like that to a casual observer, but at the end of the day, you know, we have to do what's right for our business. We have to answer to our shareholders.

GLINTON: Instead of building a new plant in Mexico, Fields says Ford will invest in facilities in Michigan, adding about 700 jobs. When asked to quantify how big of a role the president-elect's tweeting and cajoling went into the decision, Fields couldn't give a percentage.

FIELDS: Clearly it was a factor. You know, we have a president-elect who said very clearly he wants to create a more positive business environment for manufacturing here in the U.S., wants to create pro-growth policies, and those things matter.

GLINTON: Kristin Dziczek with the Center for Automotive Research says Ford isn't losing out on that much by canceling its plans.

KRISTIN DZICZEK: Ford makes decisions based on business. They don't do it on politics. If it happens to make political sense, then they're going to make hay with it.

GLINTON: Meanwhile, I ask Fields how he and the company plan on dealing with the new political environment.

FIELDS: Simple answer - very carefully.

GLINTON: And then he gave a nervous laugh. Sonari Glinton, NPR News.

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