Mexico City, DF – Auto giant, Ford Motor Company, has announced their decision to cancel plans to build a new plant in Mexico.
In April of last year, Ford struck a deal with the Mexican government that would see them invest $1.6 billion for a new auto factory in San Luis Potosi. The new plant was set to build small model vehicles, however, in a statement Tuesday, the company said they would be canceling their plans to build.
Mexico’s government said it regrets Ford’s decision and has ensured that the company will reimburse San Luis Potosi state for any costs associated with the investment.
Mexico’s economy minister, Ildefonso Guajardo, said “Obviously, this isn’t a good decision for us.”
The decision to cancel came after being acutely criticized by president-elect Donald Trump who referred to the company’s decision to build in Mexico an “absolute disgrace”. Instead, the auto company announced they will put $700 million of that investment money toward their Michigan plant, a move that will generate nearly 700 jobs.
According to Ford CEO Mark Fields, the decision to cancel the new plant in Mexico is to some extent related to the need to “fully utilize the capacity of existing facilities” considering a decrease in sales of medium-sized automobiles such as the Ford Focus and Fusion.
Trump has also turned his attention toward General Motoros with the threat of a “big border tax” over compact cars being made in Mexico.
In a Twitter post hours before Ford’s announcement, Trump wrote, “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A. or pay big border tax!”