USA / MEX - Ford CEO: Trump wrong on automaker investments

Reading time: min

Ford President and CEO Mark Fields said Republican presidential candidate Donald Trump is wrong that the automaker will cancel its Mexican expansion plans — and rejected the suggestion the billionaire was responsible for moving some work to Ohio from Mexico in 2011.

Trump has spent the last six months heavily criticizing Ford for announcing in April it would invest $2.5 billion in Mexico. Trump has often gotten the facts wrong about the investment and bragged on Twitter that Ford was “cancelling” its move to Mexico. Fields again noted that Ford has been in Mexico for 90 years and has no plans to cancel its investments.

“We deal with the facts — and facts are stubborn things and at Ford we’re proud of the facts and unfortunately we suspect the facts are getting lost in the politics,” Fields told reporters and analysts on the company’s third quarter earnings call. “Facts don’t cease to exist because they’re ignored.”

Fields reiterated that Ford hasn’t made any changes to its manufacturing plans and hasn’t talked to Trump. Ford has invested more than $10 billion in the U.S. since 2011 and added 25,000 U.S. employees.

“We are very proud of the fact of what we do in terms of doing our part to drive economic development in the U.S. and many other markets we do business in around the world,” Fields said.

Trump on Monday said he should get “credit” for erroneously saying he has convinced Ford to cancel a planned new plant in Mexico and open one in the U.S.

“Mexico took a Ford plant. I’ve been very tough on the Ford. ... I heard last night that Ford is moving back to the United States — they may not do that deal. I get credit for that — I should get credit for that,” Trump said in a live interview. “I brought (Ford’s Mexican expansion plan) up in so many speeches and, frankly, I think I embarrassed them. But Ford now is going to build a big massive plant in the United States — and every single person, even my harshest critics gave me credit for that. I’m going to do that times 1,000.”

Ford, in fact, has no plans to build a new plant in the United States. Ford last opened a new U.S. plant — the Dearborn Truck Plant — in 2004.

The tough comments were a change in strategy for Ford, which has largely tried to ignore Trump for months. Fields sent Trump an email in June explaining the move, but Trump rejected it — and the rationale. In a Detroit News interview in August, Trump also said he planned to criticize other automakers that are making significant investments in Mexico — but so far hasn’t done so.

Ford officials say they haven’t seen any sign that Trump’s comments are causing potential buyers to shift to other brands — but Trump has clearly gotten under the skin of many Ford executives.

“We decided to move the F-650 and F-750 medium-duty trucks to Ohio Assembly in 2011, long before any candidates announced their intention to run for U.S. president... Overall, more than 80 percent of our North American investment annually is in the U.S., and 97 percent of our North American engineering is conducted in the U.S.,” Ford said Monday.

It is possible that Ford could announce moving some work back from Mexico as part of the United Auto Workers contract talks, but a spokeswoman confirmed Monday the automaker is not canceling its significant new investments in Mexico — or building any new U.S. plants. The company touted the fact that it has moved work back from Mexico — but that was part of a UAW contract agreement unveiled in 2011.

Fields said that decision was made “long before any candidates announced their intention to run for U.S. president — and matter of fact that was announced before the last presidential election. Those are the facts.”

Ohio Gov. John Kasich blasted Trump saying “our country needs real leadership and not empty, false rhetoric,” noting that under his leadership Ford opted to move work from Mexico to Ohio — in 2011.

“That’s how things really get done. Hard work and teamwork brings results for the people,” Kasich said.

Trump — who is leading the Republican presidential field in some polls — cited a factually incorrect story from an obscure blog called “Printly” on Sunday. It’s not clear whose behind the site that only went up a few months ago.

“Do you think I will get credit for keeping Ford in U.S. Who cares, my supporters know the truth. Think what can be done as president,” Trump wrote in one tweet that was retweeted and favorited 6,000 times.

“Word is that Ford Motor, because of my constant badgering at packed events, is going to cancel their deal to go to Mexico and stay in U.S.,” Trump wrote in another tweet.

Trump’s statements have at times misstated the purpose of the investment — he has suggested that Ford is building a single new $2.5 billion plant. In fact, Ford is building an engine and a transmission plant and expanding another parts plant.

Trump also hasn’t mentioned that Ford is not moving to Mexico and has had operations in Mexico for 90 years. Ford currently has 11,300 employees in Mexico, where it builds the Ford Fiesta, Fusion and Lincoln MKZ as well as the hybrid versions of both are manufactured in Mexico. Ford also has an Engineering Center in Mexico, which employs more than 1,100 engineers who support global projects.

Ford said in April it would invest $2.5 billion to build new engine and transmission plants in two separate Mexican states — Chihuahua and Guanajuato — and would create 3,800 jobs with a new engine plant in Chihuahua, expansion of Ford’s I-4 and diesel engine lines in Chihuahua and a new transmission plant — Ford’s first in Mexico — in Guanajuato.

In August, Trump suggested one way to stop automakers’ expansion to Mexico is by moving some production out of Michigan to lower-wage states.

“I don’t like what’s happening,” Trump told The News in August. “We’re losing our jobs. We’re losing our wealth. We’re losing our country ... Why can’t we do it in this country? It’s an incredible thing that we’re not allowed to make our product.”

Trump has repeatedly said that if elected, he would not allow Ford to open a new plant in Mexico. At his campaign announcement speech in New York in June, Trump said he would call Fields to explain the “bad news” and would force Ford to back down.

“Let me give you the bad news: Every car, every truck and every part manufactured in this plant that comes across the border, we’re going to charge you a 35 percent tax,” Trump said. “They are going to take away thousands of jobs.”

It isn’t clear how Trump could legally single out one automaker for punitive taxes — and the move would violate current U.S. free trade agreements.

In July, Ford said it would end small car production at its Michigan Assembly plant in Wayne. It didn’t say where it would locate production, but some analysts have suggested the work will move to Mexico. The automaker has insisted it has no plans to close the Wayne plant and will add new production.

General Motors Co. in December announced a $5 billion investment in Mexico over six years. GM has four complexes in Mexico with 14 manufacturing plants comprising assembly, engine, transmission, stamping and foundry work which employs about 15,000 people.

In addition to the Ford and GM expansions, BMW AG, Volkswagen AG and its Audi unit, Nissan Motor Co., Kia Motors and Fiat Chrysler Automobiles NV are among the automakers that have built or announced new plants or plant expansions.

Many automakers have decided they can’t build small cars profitably in the U.S. Auto workers in Mexico make as little as $9 an hour. In addition, Mexico has dozens of free trade agreements around the world, free or nearly free land on which to build, and fewer regulatory hurdles.