Ford Auto has concluded plans to shift the production of the Focus compact car from the United States to China. The automaker plans to ship many of these cars back to the U.S. to sell.
The move, according to CNNMoney, is more bad news for Mexico than it is for the United States. While the Focus has been built at the Michigan Assembly plant in Wayne, Michigan for years, Ford had previously announced plans to shift its production to Mexico. Ford wants to make room for larger, more profitable vehicles at the Michigan plant, which employs 3,600. The factory won’t lose any jobs as a result of the move.
Ford will start building its new small pickup, the Ranger, in 2018, after the Focus moves to China. In 2020, it will build the new Bronco, the SUV model it is bringing back, at the Michigan plant.
Ford also said it will invest $900 million in its Kentucky truck plant to build the new versions of the Ford Expedition and Lincoln Navigator, there. It said that investment would protect 1,000 jobs at that plant.
But the company’s decision to shift production of small cars to Mexico became a hot-button issue during last year’s presidential campaign, when then-candidate Donald Trump repeatedly attacked the company’ for exporting jobs from the United States. He even falsely accused Ford of planning to shift all of its auto production and jobs to Mexico.
In January, Ford announced that it had canceled plans to build a new plant in Mexico to build the Focus. Trump heralded that as a victory, even though Ford said it would still build the Focus in Mexico, just at an existing plant.
Shifting the Focus to China is a sign of the weak demand for small cars in the United States, and of the growing importance of China, which is the largest autos market in the world. U.S. sales of the Focus are down 20 per cent so far this year.
China also is a very low cost producer of cars. Ford estimates it will save $500 million a year by building in China rather than at the Mexican plant it had been looking at.
Building in China [for the U.S. market] will become more common,” said Michelle Krebs, senior analyst for AutoTrader. “The small car market has fallen far more than anyone anticipated. Ford needed to find a low-cost way to produce them. They’re already making the Focus in China. This just made sense.”
Ford is under great pressure to cut costs to shore up the billions of dollars it needs to invest in electric cars and self-driving vehicles. It recently announced plans to trim $3 billion in annual costs, including plans to cut 1,400 white collar jobs, and replaced its CEO.
