Ford Motor Co still plans to relocate some production to Mexico despite the rhetoric of US president-elect Donald Trump, who denounced the move and has threatened to impose hefty tariffs on car imports.
“We look forward to working with the new administration. Our plan is to move our Focus down to Mexico to make room for two very exciting products that will be coming down to the Michigan center,” Ford chief executive officer Mark Fields told reporters on Tuesday.
Speaking at the opening of the Automobility LA auto show in Los Angeles, Fields said a 35 percent import duty on cars produced in Mexico, which Trump threatened during the campaign, would hurt the US economy.
Photo: Bloomberg
“A tariff like that would be imposed on the entire auto sector, that could have a major impact on the US economy,” he said. “I continue to think that the right policies will prevail because we continue to share the same objective which is a healthy and vibrant US economy.”
Asked by reporters about the consequences of renegotiating or pulling out of free trade agreements such as North American Free Trade Agreement (NAFTA) — something Trump has pledged to do — Fields said Ford remains “a big supporter of free and fair trade” but added: “We’ll see how things play out.”
His remarks echoed those made by BMW AG chief executive officer Harald Krueger in the wake of the real-estate tycoon’s surprise election win last week.
Fields said of Trump: “We look forward to working with him to consolidate the US economy.”
Ford would continue to advocate for policies on currency manipulation and fuel standards that are “in line with market realities,” as well as tax reform and “the safe adoption of autonomous cars,” he said.
During the bitter campaign for the White house, Trump criticized US companies for relocating production abroad. Computer giant Apple Inc has been one of his main targets.
Ford in early April unveiled a US$1.6 billion investment in a new facility in Mexico, where the workforce is very cheap compared to the US. The plant will be operational in 2018. Car companies that move US factories offshore have become a frequent target of politicians and local elected officials, not least because General Motors Co and Chrysler Group LLC — although not Ford — were saved from bankruptcy in 2009 with a government bailout.
Jessica Caldwell, an analyst at the Edmunds.com automotive Web site, said the most immediate challenge created by a Trump administration, even more so than the renegotiation of international trade agreements, is to question government subsidies on electric cars.
Trump, who has denied the existence of climate change, suggested during his campaign that he would close the US Environmental Protection Agency, and his government might decide to eliminate federal incentives for the purchase green cars.
“The big concern now is the government subsidies for green cars,” Caldwell said, adding that manufacturers have spent tens of millions of dollars to reduce gasoline consumption and polluting emissions.
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