Republican candidate Donald Trump during the campaign had repeatedly stressed the importance of producing in the United States so that jobs remain in the country. He had also warned businesses by saying that stiff tariffs would be imposed when products are imposed back into the US. Trump had also said that he wants to build a wall in the US-Mexico border, and renegotiate North American Free Trade Agreement or NAFTA and its terms, where Mexico is a member country.
Trump has since been elected as the incoming President and a week after that, there are no signs of him changing his stance.
Ford Motor Defies Trump
In an apparent defiance to what the new President says, the Ford Motor Company (NYSE:F) now says, they want to shift production of cars from their plant in Michigan to Mexico. The business has its headquarters at Dearborn in Michigan.
It’s not a new stand from the business. Ford had earlier also said that production would be shifted to the neighboring country, and Trump had severely opposed that, saying a 35 percent might be imposed when the cars are shipped back into the United States. But Trump’s target was not just Ford. Any business that does this will attract the tariff.
On Tuesday, speaking at an auto show in Los Angeles, Mark Fields, who is the Chief Executive, said Ford is “going forward” with their plans of shifting the production of small cars to Mexico from the company plant in Michigan. No jobs in the US are going to be lost though because of this decision.
C-Max and Focus Vehicles to be Made in Mexico
Production of the company’s C-Max and Focus vehicles are to be shifted to the new facility in Mexico. That is going to happen in another two years. Ford (NYSE:F) will then start making two new vehicles in their Michigan plant.
The Ford CEO also warned Trump by saying that a stiff tariff like as mentioned by Trump wouldn’t just affect the car industry, but that its impact will be negative on the entire US economy”. But he seemed confident that Trump wouldn’t go through his promises, “I continue to think that the right policies will prevail because we continue to share the same objective which is a healthy and vibrant US economy”.
Mark Fields also expressed support for the NAFTA and other free trade deals. Only last week, the chief executive of BMW, Harald Krueger, had also supported NAFTA.