Ford to announce $2.5 billion investment in Mexico

Michael Martinez
The Detroit News

Ford Motor Co. on Friday will announce a $2.5 billion investment in Mexico, a source confirmed to The Detroit News.

Reuters, citing industry sources, first reported the investment, which it said would include money for a transmission plant, and an expansion of Ford's plant in the northern Chihuahua state, where it will build two new diesel engines.

Ford on Tuesday released a statement saying it "cannot comment on future product or manufacturing plans."

Ford currently builds 4.4-liter and 6.7-liter diesel engines at its 727,000-square-foot Chihuahua Engine Plant. Its Mexico operations also include Cuautitlan and Hermosillo Stamping and Assembly plants, and a joint-venture with Getrag to build six-speed transmissions.

The number of diesel engines the Dearborn automaker offers constantly changes by region as it shifts what vehicle models do and do not offer them.

Ford product chief Raj Nair said last November the automaker could add a diesel engine option on the F-150 pickup if the opportunity makes sense.

Ford would be the latest in a number of automakers who are turning to Mexico to build new plants or expand operations. Mexico is the fourth largest exporter of vehicles globally and eighth largest producer, according to the Mexican Automotive Industry Association.

Last December, General Motors Co. said it will invest $5 billion in Mexico over six years, dating from 2013 through 2018, and will add 5,600 new jobs in the region. The Detroit automaker said the investment includes $1.4 billion announced or implemented in the past two years and $3.6 billion will come over the next four years.

"Mexico has put so many of these free trade agreements in place in a very shrewd move and it's worked," said Karl Brauer, senior analyst with Kelley Blue Book. "It's drawing in automakers and all sorts of industries because of the low cost of doing business there and selling the products across the globe."

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