LAREDO, Texas – When Ford Motor Company announced it had changed its mind about investing in a $1.6 billion plant in San Luis Potosi, there was a lot of reaction in South Texas.
Rather than build an assembly plant for small vehicles in the Mexican state, the second largest auto maker in the U.S. announced Tuesday it would be add 700 new jobs in its Flat Rock Assembly Plant in Michigan.
The idea is “to produce high-tech electrified and autonomous vehicles,” was read in the Ford Motor Company official Twitter account.
Gustavo Puente Orozco, secretary of economic development for San Luis Potoso, told MVS News Service that Ford announced its decision directly to Governor José Manuel Carreras. “The announcement came as a surprise,” Orozco said. He pointed out that Ford will pay for all the cancelation costs and said the state government will not apply any penalization fee. “The highest cost was the land,” Orozco said.
For Congressman Henry Cuellar, D-Laredo, the decision will have an impact on the South Texas border region. “When an import comes in from China, Europe or India, it will have four percent American parts. When it’s an import coming in from Canada it will have 24 percent American parts. But, when something comes in from Mexico, it will have 40 percent American parts,” Cuellar explained.
Cuellar pointed out that importing automobile parts or cars involves many businesses in the process, including custom brokers, logistic, freight forwarding and trucking companies. This means, he said, that if American companies have no businesses in Mexico, these local companies won’t be able to handle those services.
Cuellar made it clear he would prefer to have companies stay in the United States. However, he said, “anything that won’t come in through our bridges means less work for our companies and that means less revenues for our cities.”
Cuellar elaborated on this point: “We want to create jobs in the United States, and if the company can’t stay here and create jobs here, I strongly would welcome (the establishment in another country) without a doubt,” Cuellar said to the Rio Grande Guardian. “At the same time, we do know that a lot of things that we have here, specially cars, aren’t 100 percent made in the U.S.”
When Ford Motor Co. announced Tuesday it will cancel its planned $1.6 billion production plant in San Luis Potosi, President-Elect Donald Trump tweeted the following statement: “Thank you Ford for scrapping a new plant in Mexico and creating 700 new jobs in the U.S. This is just the beginning – much more to follow.”
Ford CEO Mark Fields told CNN that the move is a “vote of confidence” in President-elect Donald Trump’s pledge to create a pro-business environment. However, Fields said he did not negotiate a special deal with Trump.
But Cuellar added Trump should apply this to his own private companies, such as the Donald J. Trump Collection, which sells a diversity of merchandise.
According to an article published by the Washington Post in August 2016, products being sold by Trump’s company are made abroad. Countries such as China, Bangladesh, Honduras, Vietnam, Germany and Vietnam are on its labels, according to the article.
“If they really wanted those clothes to have the Trump label, they needed to find those American companies and make them here. They are bringing in clothes from Malaysia and India but putting a Trump Label,” Cuellar expressed. “In many ways that reminds me of cars. Some car parts are made here and are sent out to maquiladoras, and then they are brought back to the United States.”
Cuellar added that even Trump’s famous airplane was from Aviacsa, a Mexican company.
The plan for a Ford Motor Company plant in San Luis Potosi was to produce 350,000 cars annually. Eventually, the new Ford Focus could have been produced there, moving from Ford’s Wayne, Michigan plant.
The additional investment in the U.S. will include boosting production of its Ford Mustang and Lincoln Continental models.
In a statement, Ford Motor Company said it will continue to build its Focus at an existing plant in Hermosillo, Mexico, to improve company profitability.
“Again, I want to have more of those American companies do things here in the United States, but you can’t stop the globalization of our economy, and we are seeing that in so many ways. The automobile industry is one of those areas,” Cuellar concluded.