After Donald Trump threatened General Motors on Tuesday, Ford Motor Company announced it is canceling plans to build a $1.6 billion plant in San Luis Potosi. Is that a coincidence?
Dan Scavino, director of social media for Trump, chortled on Twitter:
Trump warned GM on Tuesday that it should build its Chevrolet Cruze hatchback in the United or pay a significant tariff:
Trump had already slammed Ford during the presidential campaign for its plans to move small car production from the U.S. to Mexico.
According to Bloomberg, on Tuesday, Ford announced it would eschew building the Mexican plant, instead building two products at a factory in Wayne, Michigan. That plant already assembles the Ford Focus. Ford’s chief executive officer, Mark Fields, acknowledged that the next-generation Focus compact car will be built at an existing factory in Hermosillo, Mexico. He told reporters, “One of the factors we’re looking at is the more positive U.S. business environment that we foresee under President-elect Trump and the pro-growth policies that he’s been outlining. This is a vote of confidence around that.”
“(Ford) will avoid the risk of a border tax and a smack in the face from the new president.”
Erik Gordon
On Tuesday, Ford Executive Chairman Bill Ford called Trump to tell him the Mexican plant had been canceled.
But Fields also told Bloomberg Television that the plant would have been canceled even without Trump’s actions, protesting that the small cars Ford builds in Mexico aren’t selling in the U.S.
Erik Gordon, a professor at the University of Michigan’s Ross School of Business, concurred, stating, “It is the wrong time to build new plants in Mexico.” He added that Ford would save money, “American jobs, and will avoid the risk of a border tax and a smack in the face from the new president.”