On Tuesday, Ford Motor Company canceled their $1.6 billion plan for a Mexican plant and will instead invest $700 million in expanding a current plant in Flat Rock, Michigan, according to CNN.
This decision comes almost two years after President-elect Trump initially criticized Ford for their plans to build a new assembly plant for their next generation Ford Focus in San Luis Petosi, Mexico, even though the company insisted that no American jobs would be lost as a result of the move. Instead, the automaker will invest $700 million and create 700 new jobs in Flat Rock, Michigan to build self-driving and electronic vehicles. According to the Detroit Free Press, the new Ford Focus will instead be produced in a plant in its Hermosillo, Mexico factory.
This announcement comes one month after President-elect Trump and Vice President-elect Mike Pence announced that Carrier, the Indianapolis-based air conditioner company, would keep approximately 1000 jobs in the area out of 2000 jobs that were going to be lost to Mexico. Yet the Carrier deal was met with criticism because of the tax breaks and government grants offered to the company in order to coerce them to keep the jobs domestically, which conservatives view as government interventionism in the free market economy.
However, the Ford decision was not made because of any deal with President-elect Trump. Mark Fields, CEO of Ford Motor Company, told CNN’s Poppy Harlow that the company’s decision to cancel plans for the Mexican plant was done independently, but that they were encouraged by pro-business policies that the president-elect has outlined that could encourage businesses to invest in the United States. “We didn’t cut a deal with Trump. We did it for our business,” Fields said.
This appears to be a win-win-win scenario. Ford believes that it will benefit from new policies by the president-elect to make creating jobs in the United States worth the investment, but without needing to be bribed by tax breaks and government grants. The investment in manufacturing self-driving and electrical vehicles could also benefit Ford, since Fields said he wants the company to be a leader to the future of automobile manufacturing. Ford also saves money by cutting its investment from $1.6 billion to $700 million.
While it is uncertain how much influence President-elect Trump had in Tuesday’s decision besides what Fields highlighted, the president-elect could use this opportunity to give credit to himself, as the decision does make him look like he is saving and creating hundreds of jobs even before he is sworn into office.
And while the original decision to build a plant in Mexico was not going to mean losing American jobs, domestic job creation is always a plus. It helps Michigan continue to be No. 1 in job growth in the manufacturing sector after falling between the years 2000 and 2009.
Overall, this is welcome news for the new year, and we can hope that job growth can continue with pro-growth policies under a Trump presidency.