Ford cancels plans for Mexico plant as Trump warns to tax General Motors

Ford Motor plant in Cuautitlan Izcalli, Mexico

President-elect Donald Trump warned to put tax on General Motors for importing compact vehicles to the United States from Mexico on Tuesday as competing Ford canceled strategies to open a new compact vehicle plant south of the border.

Trump tweeted early Tuesday that General Motors was sending out Mexican-made Chevrolet Cruzes to the United States tax-free. He informed General Motors to make the vehicles in the United States “or pay big border tax!”

General Motors reacted that it makes the huge bulk of its Cruzes in Lordstown, Ohio, near Cleveland. Just hatchback variations of the Cruze are imported from a factory in Ramos Arizpe, Mexico, and those total up to just a little portion of the 172,000 Cruzes sold by automaker through November, representative Patrick Morrissey stated.

On the other hand, Ford revealed it would not open a planned center for assembling Ford Focuses, which would have brought $1.6 billion and 2,800 jobs to the state of San Luis Potosí. In place of it, the automaker will create 700 jobs at an expense of $700 million to a United States plant located in Michigan, the company revealed, as part of its organized growth of electrified and automated automobiles.

Ford cautioned shareholders in September that prospects for 2017 were grim and automobile sales were most likely to decrease. The automaker lowered its profits projections for the year by $600 million.

Rebecca Lindland, executive expert for Autotrader and Kelley Blue Book, stated Ford’s decision was most likely driven in part by California’s zero-emission automobile mandate that comes into effect in 2018. The mandate states 15% of all brand-new automobiles sold in California will have absolutely no emission by 2025.

“Ford’s investment in both brand-new electrified item and production ability at its Flat Rock, Michigan, plant will assist position the company to fulfill the coming standards. The production investment is likewise great news for the UAW [United Auto Workers] and, I think, news that will make the incoming Trump administration very happy,” she stated.

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