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Businesses Power United States Technology

Ford: We're Canceling $1.6 Billion Mexico Facility, Investing In Electric and US Plant (arstechnica.com) 432

Posted by BeauHD from the up-and-coming dept.
An anonymous reader quotes a report from Ars Technica: Today at the Flat Rock Assembly Plant, Ford Motor Company CEO Mark Fields unveiled a large-scale electric vehicle initiative that will run through the company's next five years. Ford plans to invest $4.5 billion in electric vehicle production by 2020, and the company said it will produce 13 new electric vehicles, including a Mustang, an F-150, police cars, and a Transit Custom van. Additionally, Fields revealed that Ford would be canceling a previously announced $1.6 billion-production facility in Mexico. Instead, the company wants to invest $700 million in the existing Flat Rock facility, generating 700 new jobs focused on EV and autonomous initiatives at that location, according to Ford. Ford described seven of the 13 upcoming EVs during its press conference today. The F-150 Hybrid will be available by 2020 in North America and the Middle East, and Fields noted it'll be powerful enough to stand-in for on-site generators in a pinch. The Mustang Hybrid will deliver "V8 power and even more low-end torque" according to Ford; it too is intended for a 2020 release. Generally, electric motors are well suited to applications where you want a lot of immediate torque, so their presence should work well in a light duty truck like the F-150. Among the other notable vehicles highlighted, Ford is planning a fully electric small SUV that can "deliver an estimated range of at least 300 miles" by 2020. The company also wants to produce an autonomous vehicle "designed for commercial ride hailing or ride sharing" in North America by 2021.
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Ford: We're Canceling $1.6 Billion Mexico Facility, Investing In Electric and US Plant More

Ford: We're Canceling $1.6 Billion Mexico Facility, Investing In Electric and US Plant

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  • Yay (Score:5, Insightful)

    by Hognoxious ( 631665 ) on Tuesday January 03, 2017 @04:21PM (#53600245) Homepage Journal

    Go Trumperor!!!!!

    • Thanks to Trump? Obviously! (Score:4, Insightful)

      by Pollux ( 102520 ) <speter@tedata[ ]t.eg ['.ne' in gap]> on Tuesday January 03, 2017 @05:00PM (#53600565) Journal

      Because we all know that billion dollar investments from multi-billion dollar corporations can be changed overnight on the whim of a Tweet.

      • Re:Thanks to Trump? Obviously! (Score:5, Insightful)

        by Aighearach ( 97333 ) on Tuesday January 03, 2017 @07:49PM (#53601563)

        The really funny part is that the whole narrative doesn't add up; the claim is they were going to invest $1.6B in Mexico because everything is cheaper there, so instead now they're going to invest $700M in the US because... Trump. That math just doesn't work out. Obviously what actually happened is that the thing they were thinking about building for $1.6B simply isn't going to happen right now, and a totally unrelated thing that costs $700M is happening in the US. Maybe those are related, maybe not, but the narrative is clearly not true.

        • Maybe it costs 1.6 billion to build a new factory in Mexico, and $700 million modernizing an existing plant in the United States. Under the previous rules they thought were going to be in place, they would have recouped the $900 million dollar difference. Trump's plan is to incentivize building in the US, disincentivize building elsewhere- and this changes the risks and calculations associated with the project.
          So I wouldn't say the 'Narrative is clearly not true.' With Gruber, Rhodes, and Clinton continuous

          • Re:A BS Narrative? Rhodes is getting kicked out of (Score:4, Insightful)

            by Aighearach ( 97333 ) on Tuesday January 03, 2017 @09:36PM (#53601995)

            There are a whole bunch of logical problems with your fantasy. Yeah, sure, before they didn't mind wasting $900M, but now since the President hand-waved and said that Congress will make a bunch of new (totally unspecified) rules, they're suddenly happy with it. That just doesn't work as an explanation. It is plain horse-shit. Your reply had zero content, zero logic. All you did is present a nonsense narrative that is clearly not true.

            Obviously, some true series of events happened. But they're not what is claimed in the story, and they're not what you made up either.

            • We're both engaging in conjecture, you seem upset that my conjecture is different from yours. Perhaps you'd be happier on something that isn't so much a discussion board as a proclamation board?

              • Even a business 101 class would inform you that predictability is an important business concern. Businesses do not do knee-jerk reactions that cost $900M based on new rules that haven't even been made! That's complete nonsense. No conjecture required to reject that as an explanation. Notice, I didn't actually engage in conjecture; I'm not saying why they did it, I'm saying exactly that we don't know why. We don't have enough information to make a reasonable claim, but we do have enough information to reject

              • I understand your conjecture as saying that Ford was going to spend $1.6G in Mexico rather than spending $700M in the US, for essentially the same thing, before changing its decision. It seems very odd that Ford would spend $900M extra just to locate a plant in Mexico rather than the US. Labor costs would be less in Mexico, but by that much?

                Aighearach's conjecture is that there were two unrelated projects, one costing $1.6G and one costing $700M, and they dropped the first and are proceeding with the s

        • Try reading the words "existing facility". Did you consider that maybe it cost less to ramp up at an existing facility and add to existing employees than to start from scratch and train an entire new set of employees? Also, the Mexico sum was apparently intended to be spent over a longer time frame.

  • Good, but... (Score:5, Insightful)

    by Anonymous Coward on Tuesday January 03, 2017 @04:27PM (#53600287)

    While this is ultimately an economic decision (small car sales are waaaay down and Ford doesn't need another factory), I can't imagine the threat of tariffs didn't factor into the decision to cancel the Mexican factory. Nevertheless, it's amazing how the online comments sections are taking a black vs.white/pro vs. anti-Trump side to a nuanced subject.

    Ultimately, this is good news for Michigan workers, whether or not we bring politics into the discussion.

    • Re:Good, but... (Score:5, Insightful)

      by bobbied ( 2522392 ) on Tuesday January 03, 2017 @04:44PM (#53600435)

      The question of if Trump deserves the victory lap or not is really moot... What matters is how the voters/workers in Michigan and elsewhere perceive this move by Ford...If THEY think Trump is responsible, then that's all that matters. Give Trump his due, he's at least TRYING to market himself using these accomplishments.

      Besides, all the political posturing is not new... What IS new though is a Republican (even if in name only) is taking credit for something largely seen as a good thing for labor... After all, we've been beguiled with tall tales of Obama's accomplishments for 8 years where he's taken credit for things he wasn't responsible for (and a few things he actively took actions to oppose.)

      • Re: (Score:2)

        by Etcetera ( 14711 )

        Besides, all the political posturing is not new... What IS new though is a Republican (even if in name only) is taking credit for something largely seen as a good thing for labor...

        Mod parent up. Wish I had them of my own.

      • Re: (Score:3, Insightful)

        by Anonymous Coward

        Michigan voter here - We voted for Trump already. Hillary called us deplorable. She should have been her talking about the auto bailouts.

    • Re: (Score:3, Insightful)

      by haruchai ( 17472 )

      While this is ultimately an economic decision (small car sales are waaaay down and Ford doesn't need another factory), I can't imagine the threat of tariffs didn't factor into the decision to cancel the Mexican factory. Nevertheless, it's amazing how the online comments sections are taking a black vs.white/pro vs. anti-Trump side to a nuanced subject.

      Ultimately, this is good news for Michigan workers, whether or not we bring politics into the discussion.

      Politics has long been a part of every economic discussion, especially where foreign vs domestic jobs are concerned.
      But Obama did a lot more for the auto industry & Michigan, but it'll make scant difference to his legacy.

      • Obama propped up the status quo in the American auto industry. Whether or not that was a good thing is debatable. Only Ford was healthy enough and managed well enough to not require any government bail outs. The industry did not have an opportunity to self-correct or those brands be sold and taken over by more competent management (no one bailed Hostess out when they failed, and guess what? I can still buy Hostess Twinkies the same as ever.) The fact that Ford is looking firmly into the future of both ene

        • Re: (Score:3)

          by haruchai ( 17472 )

          "Only Ford was healthy enough and managed well enough to not require any government bail outs"
          It's been a long time since Ford could make everything they needed for their cars.
          Despite their relatively healthy status compared to the other automakers, they supported the call for the industry to be saved since the collapse of the competition would have devastated their own supply chain.
          So one way or another, they too got a bailout and would have been devastated without one.
          Ford also accepted $6 billion in supe

      • But Obama did a lot more for the auto industry & Michigan, but it'll make scant difference to his legacy.

        Maybe, but I'm not sure if any of it would have happened if it weren't for this guy.
        https://en.wikipedia.org/wiki/... [wikipedia.org]

    • ultimately they are Michigan workers and even Americans but I'm going say to the 700 new jobs probably won't benefit they entire state just the little town of flat rock and maybe a few surrounding communities.

      • I've read before that the multiplying effect of a factory job is between 4x and 8x. So for every factory job you create, you also create jobs at diners and clothing stores for the workers, transportation companies to move materials to and from the factories, etc. Do that enough and you have a state's economy.

    • It isn't nuanced once it becomes a pattern.

  • Finally Ford see the future. (Score:5, Insightful)

    by Higaran ( 835598 ) on Tuesday January 03, 2017 @04:28PM (#53600301)
    I've alway been a fan of ford, but they have been dragging ass for a long time, only just barely innovating for the last few years. I'm glad they finally realize that they are going to need to really start pulling more into electric and hybrids. I think the biggest thing pushing them is actually emissions. From my understanding it's impossible for a big V8 to pass the new emissions regulations that will be even more stringent next few years.

    • ...From my understanding it's impossible for a big V8 to pass the new emissions regulations that will be even more stringent next few years.

      1978 called, they want your comment back.

      • Re: (Score:2)

        by Higaran ( 835598 )
        Current ford v8's already do not pass most of the emissions standards, but are legal to sell because Ford as a manufacturer has certain limit they can go on various areas, so they still have a small number of them. Going forward the new limits specifically say how much soot and other various chemicals are allowed, and the v8's can not pass. The only thing I can think of is if they did something similar to the diesel engines where they have a particulate filter that gets burned out on a regular basis, but

        • Current ford v8's already do not pass most of the emissions standards, but are legal to sell because Ford as a manufacturer has certain limit they can go on various areas, so they still have a small number of them. Going forward the new limits specifically say how much soot and other various chemicals are allowed, and the v8's can not pass. The only thing I can think of is if they did something similar to the diesel engines where they have a particulate filter that gets burned out on a regular basis, but I don't see that make sense for cars.

          The situation was essentially the same in 1978, and a combination of advancing technology and refinements of the requirements led to the resurgence of the muscle car in the late 1990s.

          • Re: (Score:2)

            by boskone ( 234014 )

            yes, and light trucks don't get much better mileage than in 1978 either.

            the massive benefits of modern fuel injection, FADEC and other enhancements have mostly been squandered on more weight (heavier vehicles, partially for "safety") and to work through the catalytic.

            very, very recently (ecoboost) and a few others have brought some marked improvement, but it feels like a fraction of what we should have had. I could get 20 MPG in my 79 scout with a v8, carbeurator and "barely" electronic ignition.

            • I read a recent Mazda press release about how they "ecofying" their new engines making them more efficient and cleaner: 4 into 1 scavenging exhausts, variable geometry intakes (the modern version of a 4 barrel carb), hemispherical piston heads... I forget what all they listed, but every single thing was stuff that was known, and practiced in the 1960s by anybody who cared. Basically, they're saying that they're not turning out bottom-dollar cast iron turds anymore, they're starting to do the things that ha

    • I think you are correct.. I think this is a result of the CAFE standards more than anything else. Electric Vehicles are not viable in the USA where distances are huge, even for urban dwellers. Where the average daily commute exceeds the EV's battery's ability to keep the wheels turning.

      • Re: (Score:2)

        by dgatwood ( 11270 )

        Where in the world is the average commute more than a 200-mile round trip? Oh, by EV, you meant those low-range pseudo-EVs that the major car companies keep building as a means of convincing federal and state governments that nobody really wants an EV so that they won't have to get serious about them....

    • Strongly disagree. The EcoBoost turbocharged 6 banger in the expedition and f150 is a beautiful engine. Better torque and HP than the V8 it replaced, and very similar in performance to the much touted (and now maligned) 6 cylinder diesels pushed by VW/Mercedes/BMW, but without the expensive maintenance, crappy emissions, and ultra slow acceleration. It is a refined, high output powerplant that is significantly better than the flashy "new technologies" going into other manufactures large vehicles. You wou

  • "We're encouraged by the pro-growth policies of President Trump," Fields said when announcing the investment shift from Mexico to the Flat Rock facility.

    While this is not quoted in the opening paragraph, this would seem to be a significant factor in the decision, and thus maybe worth at least a passing summary in the Slashdot blurb?

    • And put Trump in a good light?
      There's the rub...

    • Re: (Score:2)

      by SeaFox ( 739806 )

      "We're encouraged by the pro-growth policies of President Trump," Fields said when announcing the investment shift from Mexico to the Flat Rock facility.

      While this is not quoted in the opening paragraph, this would seem to be a significant factor in the decision, and thus maybe worth at least a passing summary in the Slashdot blurb?

      A significant factor, but seems fairly obvious, too. I wouldn't expect a company to cancel outsourcing plans normally, and the current political climate is going to be the best reason to.

      Tl;DR: It didn't need to be stated this is because Trump got elected.

  • Nothing to do with Trump (Score:3, Insightful)

    by Anonymous Coward on Tuesday January 03, 2017 @04:30PM (#53600317)

    You can figure that out in the summary alone. They are doing this because it's nearly $1 billion cheaper to invest $700 million instead of $1.6 billion.

    Follow the money, always follow the money. The Presidency almost NEVER has any impact on business decisions, although people like to think so and I'm sure Trump will play with his little horn falsely touting how he made this happen.

    • You can figure that out in the summary alone. They are doing this because it's nearly $1 billion cheaper to invest $700 million instead of $1.6 billion.

      Follow the money, always follow the money. The Presidency almost NEVER has any impact on business decisions, although people like to think so and I'm sure Trump will play with his little horn falsely touting how he made this happen.

      It's going to W all over again. Blame everything bad they do on the previous administration, and take credit for everything good that happens because of the previous administration's work.

      • You can figure that out in the summary alone. They are doing this because it's nearly $1 billion cheaper to invest $700 million instead of $1.6 billion.

        Follow the money, always follow the money. The Presidency almost NEVER has any impact on business decisions, although people like to think so and I'm sure Trump will play with his little horn falsely touting how he made this happen.

        It's going to W all over again. Blame everything bad they do on the previous administration, and take credit for everything good that happens because of the previous administration's work.

        Yep. It's easy to say this isn't because of Trump - and perhaps some single events aren't because of him - but it's obvious that a lot more of these stories are coming out of the woodwork in the last two months.

    • Re: (Score:2)

      by gral ( 697468 )
      I figured when this came out, everyone would assume it was Mr. Trump. Reading further in the article, you realize Ford is still planning on moving the smaller car divisions to Mexico. They are not building a new facility, just moving to an already existing plant. They are going to use the US factory for Light Truck and SUV mainly. So they are setting themselves up for another BIG issue when gas prices rise again.
    • ::sniff::

      WRONG!

      This is my doing, BIGLY, believe me. Ford is going to build a new truck, folks, it's going to be called the Ford Sharecropper, and it's going to have all the cyber in it, and -- did you know, we're going to build up our Ford. We're going to have such a strong Ford that nobody, nobody is going to mess with us. We're not going to have to use it. I'm going to open up our Ford laws so when they write purposely negative and horrible and false articles, we can sue them and win lots of money. W

    • A $700 million investment in place of a $1.6 billion investment? That's protectionism for you - you temporarily get more jobs at home, but your economy shrinks to less than half of its size.

    • But the president's policies CAN have a large affect on corporate business. Tax law and regulations can have a drastic affect on when, how and where a company chooses to do things.

      Where it's unlikely a president can do all that much by themselves, they do hold a large sway over the making of laws, regulations and enforcement activities, which CAN and DO have drastic affects on business activity.

      Don't believe me? Wait and watch as Obamacare is dismantled and the corporate tax rates get lowered as I expec

    • Re: (Score:2)

      by p0p0 ( 1841106 )

      "We're encouraged by the pro-growth policies of President Trump," Fields said when announcing the investment shift from Mexico to the Flat Rock facility.

      Reality. Welcome to it.

  • Two Decisions are Unrelated (Score:5, Informative)

    by retroworks ( 652802 ) on Tuesday January 03, 2017 @04:41PM (#53600411) Homepage Journal

    I have read the linked article and article in WSJ and WashPost. There appears to be some confusion in the Ars Technica article, and in the summary. The investment in the Flat Rock Michigan plant is to create new electric vehicles, to maintain employment for the Ford Escort employees, as Ford continues its plan to move the Escorts to 100% in Mexico. This is similar to the November story, when Ford moved mature Lincoln manufacturing from Louisville KY to Mexico, but invested in a new vehicle manufacturing in KY rather than close the plant.

    From the Post https://www.washingtonpost.com... [washingtonpost.com] :

    "At Ford, Joseph Hinrichs, president of Ford in the Americas, said the decision to produce the newly announced cars in the United States was made recently and without consulting people connected to Trump. Ford Executive Chairman Bill Ford shared the news with Trump in a phone call Tuesday morning, though the details of that call were not immediately available.

    While the Ford Focus will soon be produced south of the border, Hinrichs said the 3,500 workers who currently make the car at its production facility in Wayne, Mich., will instead build two yet-to-be-named vehicles, and thus those jobs will stay in place."

    Trump seems very talented at getting his name into headlines about decisions that have nothing to do with him

    • mod parent down, RTFA (Score:4, Informative)

      by scatbomb ( 1099255 ) on Tuesday January 03, 2017 @07:40PM (#53601539)

      Trump seems very talented at getting his name into headlines about decisions that have nothing to do with him

      Except for the part in the article where Ford's CEO is quoted as saying: "We're encouraged by the pro-growth policies of President Trump," Fields said when announcing the investment shift from Mexico to the Flat Rock facility. Earlier in the day, the CEO told CNN he views the investment as a "vote of confidence" in the president-elect.

      I have read the linked article and article in WSJ and WashPost

      OK, so did you miss that part, ignore it, or what?

      • Re:mod parent down, RTFA (Score:5, Insightful)

        by retroworks ( 652802 ) on Wednesday January 04, 2017 @08:46AM (#53603563) Homepage Journal
        Ford CEO certainly applauded Trump's pro-business posture. But the articles CLEARLY state that the Ford Focus and Escort jobs are going to Hermasillo (a different Mexico factory) and that the jobs in Michigan are for a completely unrelated electric vehicle which was NEVER going to be made in Mexico. Is Ford CEO smart to play it as a "thanks for lower regulations and taxes" move? Perhaps so. But the Michigan jobs (electric vehicles) were NEVER going to Mexico, and the cancelled Mexico plant operations are moving to Hermasillo in Sonora Mexico.

  • So we need someone like Trump to convince people that electric vehicles work? Pretty sad when you think about it considering I've driven a Volt for 3 years and it's been a great car. Ironic isn't it. What's next, Trump says global warming is real and suddenly everyone who's a climate denier changes?

  • The current Ford CEO is nothing like Henry Ford and looks forward to trying to further his interests without union labor. He sees this as Trump giving him the green light to attempt to do so. After all the big three can now look at the American (located) plants for Asian (headquartered) companies that are mostly staffed by non-union workers and whine that they can't "compete" unless they can reduce wages, skirt pension, and provide reduced benefits. Considering the goon that Trump wants to place in charg
    • Nothing like Henry Ford? You mean your whitewashed wishful thinking version of Henry Ford? Ford was the biggest fascist, the biggest and most violent hold-out against union organizing. Sure he finally folded in 1941, but that is hardly reason to hold him up as some example, nor to erase history.

    • The current Ford CEO is nothing like Henry Ford and looks forward to trying to further his interests without union labor.

      I'm not sure I follow you. Henry Ford fought unionization to the bitter end. Ford didn't sign a UAW contract until 1941, just a few years before he died. They were the last of the big three to do so.
      https://en.wikipedia.org/wiki/... [wikipedia.org]

      Take a look at who the UAW supported in this election (and the past ones as well). Considering that Michigan went Trump, they may want to reconsider who they support versus who their members have in mind if they wish to stay relevant.
      https://www.opensecrets.org/or... [opensecrets.org]

  • Trump’s biggest complaint about Mexico is all the people sneaking illegally into the US and then becoming a “burden on the economy.” Now, I can understand wanting to bring jobs home that are currently in places like China. But the Chinese don’t sneak across a border into the US. By limiting trade with Mexico, this hurts their economy and makes people want EVEN MORE to escape to the US. On the other hand, perhaps investing a little in the Mexican economy might make some of their p

    • That was the entire intent of extending Canada-US trade agreements to include Mexico; the theory being a prosperous neighbor is a lot better than an impoverished one. If the US basically decides to kick Mexico in the balls and walk away with the jobs that will help Mexico into the community of developed nations, then it's simply going to feed the need of so many to cross the border legally or illegally, as well as assuring that Mexico remains politically and socially chaotic.

      But when you're a demagogue usin

  • Comment removed based on user account deletion

  • Hybrid Mustang? I guess ford's the first (Score:3)

    by NotSoHeavyD3 ( 1400425 ) on Tuesday January 03, 2017 @06:39PM (#53601261) Journal
    Given that there's 3 super cars that are hybrids(McLaren P1, Porsche 918, Ferrari La Ferrari) I'm very interested how the first hybrid sport/muscle/pony car regular people can afford will turn out. Not expecting super car performance but if done right it could be quite a car.

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