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Ford To Build Two Factories In Mexico, Not US

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Ford announced it is sticking to its plan to build two factories in Mexico, despite scrapping plans to build a factory in the central state of San Luis Potosi in January 2017.

The American car maker said a factory in Guanajuato would build engines and transmissions, while a factory in Chihuahua would produce car parts for use in other Ford factories in the United States, South America, and Asia.

The factories will cost about $2.5 billion and employ some 3,800 people, said Gabriel Lopez, president and CEO of Ford Mexico, according to the Economic Times. The scrapped project in San Luis Potosi was set to cost $1.6 billion, reports AFP.

Ford is one of several companies under pressure from President Donald Trump to keep production in the U.S. and Trump has threatened companies with tariffs should they choose to operate outside of the U.S.; Ford has been in Mexico for about 90 years and employs 9,000 people.

Trump announced in a campaign speech in July 2015 that he would block Ford from building factories in Mexico, according to Fortune. In 2016, Ford Executive Chairman Bill Ford said his company employs more people at its U.S. plants than any other automaker. The company also said its new plants in Mexico would not cost U.S. jobs.

Ford has not released any similar assurances since the new factories were announced.

Mexico has attracted more than $24 billion in investment from car makers since 2010 and accounts for 20 percent of all vehicle production in North America, according to the Ann Arbor-based Center for Automotive Research and Fortune.

General Motors, a direct competitor of Ford, announced in January 2017 that it planned to invest $1 billion in its U.S. operations, according to Fortune. That will cover a number of new advanced technology, vehicle, and component projects that will lead to 1,500 new and retained jobs.

GM also announced it is working on moving production of axles for its full-size pickup trucks to Michigan from Mexico. The move is expected to create 450 U.S. jobs, according to Fortune.

Sources: AFP, Economic TimesGMA, Fortune(2) / Photo credit: Mike Mozart/Flickr

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