Tags: Ford | Mexico | Expansion | cars

WSJ: Ford to Double Mexican Plant Production

WSJ: Ford to Double Mexican Plant Production
(AP)

By    |   Sunday, 07 February 2016 06:57 PM

Published reports are saying that Ford plans to build a new auto plant in Mexico, with plans to more than double production there

Ford plans to build a new assembly complex in San Luis Potosi and expand an existing facility near Mexico City, according to The Wall Street Journal.

The Journal says the Dearborn, Michigan, carmaker will add 500,000 units of annual capacity there, beginning in 2018. That would be more than double last year's production in that country. The newspaper cites unnamed people briefed on the plan.

Costs for the project likely will exceed $1 billion, people familiar with the details said, with factory construction beginning later this year. It follows a $2.5 billion investment Ford announced last spring to build an engine and a transmission plant in Mexico.

The move reflects how Mexico has become an attractive place for global carmakers.

The Journal reported that the moves will make room for several models, including a yet-to-be-disclosed hybrid vehicle that is described as a Toyota “Prius fighter,” and will allow Ford to focus its U.S. factories on higher-profit trucks and sport-utility vehicles. Ford has said it will stop building its Focus compact in Michigan; that work will go to Mexico, a person familiar with Ford’s plans has told Bloomberg.

Ford last year built 433,000 vehicles in Mexico, or 14% of its North American production, the Journal reported.

Ford's move comes about three months after the United Auto Workers ratified new four-year agreements with Detroit-area automakers. UAW President Dennis Williams said one of the union’s biggest challenges is the shift of car production to low-wage countries like Mexico and China.

“The fact of the matter is, companies continue to run to low-wage countries,” Williams told reporters Friday at the union’s headquarters in Detroit. “There is no mathematical reason to run to countries like Mexico, Thailand and Vietnam. They’re making their profits right here in the United States,” he said, according to Bloomberg.

Autoworkers in 2013 earned $8.24 an hour on average in Mexico, compared with $37.62 in the U.S., according to the Center for Automotive Research.

Mexico is an increasingly attractive production base for global carmakers, with infrastructure, supply base and productivity all improving, analysts told Reuters.

A recent plunge in the Mexican peso against the dollar to 18 to the greenback from about 13 in mid-2014 has also made the country more appealing for U.S. manufacturers.

The San Luis Potosi plant would be the latest in a series of major bets on Mexico's auto sector, where total investment in the industry had reached $19 billion in the first two years of President Enrique Pena Nieto's administration alone.

Neither Ford nor Mexico's government would comment on the reports.

(Newsmax wire services contributed to this report).

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Published reports are saying that Ford plans to build a new auto plant in Mexico, with plans to more than double production thereAccording to The Wall Street Journal, Ford plans to build a new assembly complex in San Luis Potosi and expand an existing facility near Mexico...
Ford, Mexico, Expansion, cars
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2016-57-07
Sunday, 07 February 2016 06:57 PM
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