The UAW's president called Ford Motor Co.'s plan to make small cars in Mexico instead of the U.S. "very troubling." Donald Trump labeled it "an absolute disgrace."
But executives say it's the reality of the shrinking market for low-margin cars, even if it puts Ford in the crosshairs of a presidential election in which globalization and its effect on working-class American jobs has become a central issue. Weak car sales also compelled Fiat Chrysler Automobiles to announce 1,300 job cuts in Michigan last week.
Ford plans to start building a $1.6 billion plant in Mexico this summer, without waiting to see if Trump gets a chance to follow through on threats to tax vehicles crossing the border.
"We're a proud American company," Joe Hinrichs, Ford's president of the Americas, told Automotive News. "We set up our global manufacturing footprint and our facilities where we think it makes the most sense for our business."
Ford said the plant, scheduled to open in 2018 and create 2,800 direct jobs by 2020, is necessary to make its small cars more profitable and that no jobs will be cut in the U.S. as a result. It plans to halt U.S. production of its Focus and C-Max compacts in 2018, dedicating its Michigan Assembly Plant to lucrative pickups and SUVs instead, sources have said.
That means the 3,700 people who work there should have better job security building the bigger, costlier vehicles consumers can't get enough of than continuing to make slow-selling compacts, many of which now end up in rental fleets. But UAW President Dennis Williams -- who has known of Ford's plan for nearly a year but didn't block it during last fall's contract talks -- still blasted Ford for shifting production south of the border and criticized the trade agreements that allow it.
"For every investment in Mexico it means jobs that could have and should have been available right here in the USA," Williams said in a statement. "Companies continue to run to low-wage countries and import back into the United States. This is a broken system that needs to be fixed."