Focus operations will be phased out of Michigan from mid-2018 and relocated to the Chongqing plant in China. Ford’s president of global operations confirmed the company would inform the White House this morning.By importing its small Ford Focus car from China in 2019, Ford Motor Company plans to save up to $1 billion (897 million euro), including $500 billion from the decision to cancel plans for a brand new plant in Mexico.
Ford already manufactures the Focus model for Chinese consumers, but imports to the United States will begin for the first time. Earlier this year, under pressure from US president Donald Trump, Ford backed out on a $1.8 billion plant in San Luis Patosi, investing $700 million to expand an existing facility in the US state of Michigan to make electric, hybrid and self-driving vehicles.
But Ford, whose CEO Jim Hackett succeeded Mark Fields in late May, announced that discussions to move manufacturing of the Focus model to China had been ongoing for several months.
Joe Hinrichs, president for global operations, said the decision to export from the Chongqing plant “was not a variable cost decision,” adding that it allows Ford “to free up a lot of capital” with than managing two plants in the United States. Future models could also be imported from Europe in the future.
President Donald Trump threatened carmakers with stiff border tariffs if they manufactured outside of the United States. But Hinrichs said “the capital saving outweighs the risk” of a potential tax on the Focus, which will be built and exported from China as of early 2019.
Hinrichs confirmed the White House would be informed of the decision this morning.
Partly as a result of the cancellation of the new Mexican plant, Ford posted their first quarterly losses since 2009 this year.
