Ford Owes Providers Payouts After Mexico Car Plant Canceled

Ford Motor is dealing with a plan to compensate parts makers that were planning to provide the plant the automaker canceled recently and will return the land to the government of Mexico, an executive stated.

The structure was put and some steel beams were increasing at the site of the small-car factory, President-elect Donald Trump talked about it during the campaign, Joe Hinrichs, Ford’s president of the Americas, informed reporters Wednesday. The company will ultimately reveal the construction cost of the aborted task, he stated.

“It’s not an easy decision to cancel a plant that you’ve already started,” Hinrichs stated after a speech at Automotive News World Congress in Detroit. “We don’t take it lightly. It was a big decision to develop the plant in the first place and it was a big decision to cancel it.”

Ford informed Mexico’s federal government of its intent to scrap the $1.6 billion small-car factory on the early morning of January 3, just before announcing it to public. The company now plans to build Focus compacts at its existing car plant in Hermosillo, Mexico. Executives made the decision when they saw the latest sales forecasts for the car were lower than anticipated, Hinrichs said.

“We stayed true to our commitment to the Focus program to make it in Mexico,” he stated.