Ford announces $2.5 billion Mexico investment

Michael Martinez
The Detroit News

Ford Motor Co. on Friday made official a $2.5 billion investment in Mexico for two new plants and an expansion of a diesel engine line that will create about 3,800 jobs.

Ford will spend $1.1 billion to build an engine facility within its Chihuahua Engine Plant, where it will produce a new gasoline-powered engine, creating 1,300 jobs. Ford will export the engines to the U.S., Canada, South America and the Asia Pacific region.

In addition, Ford will spend $1.2 billion to build a transmission plant within the premises of a facility used by transmission supplier and partner Getrag, which is based in the city of Irapuato in the state of Guanajuato. The project will create 2,000 jobs.

The new transmission plant — Ford's first transmission facility in Mexico — will produce two all-new automatic transmissions for key products primarily in South America, Europe and Asia Pacific as well as other North American markets.

The automaker will spend $200 million and create 500 more jobs to expand its current I-4 and diesel engines production in Chihuahua.

"Ford is making a significant commitment to our business in Mexico with investment in two new facilities, while aiming to make our vehicles even more fuel-efficient with a new generation of engines and transmissions our team in Mexico will build," Joe Hinrichs, Ford's president of the Americas, said in a statement. "These new engines and transmissions will help deliver even better driving experiences and fuel economy gains for customers around the world."

Ford made the announcement Friday during a ceremony with Mexican President Enrique Peña Nieto.

Ford is the latest automaker to turn to Mexico. Toyota Motor Corp. said Wednesday it will build a $1 billion plant in Mexico. And in December, GM said it is investing $5 billion in Mexico over six years, dating from 2013 through 2018, and will add 5,600 new jobs in Mexico. GM Mexico employs about 15,000 people.

Automakers are bypassing the U.S. for new plants in part because Mexico has dozens of free trade agreements around the world, low wages, free or nearly free land on which to build and fewer regulatory hurdles. The investments also put pressure on the United Auto Workers coming contract talks with Detroit's Big Three automakers, since U.S. automakers will emphasize competitive pressures in talks.

"The announcement by Ford to invest 2.5 billion in Mexico is disappointing but not any more disappointing than GM's decision to invest $5 billion in Mexico or similar investments like FCA Chrysler, Nissan, Mazda, Honda, and now both Toyota and Kia, which have announced investments in Mexico," UAW President Dennis Williams said in a statement.

"The fact is that these companies are taking advantage of slavelike wages and corruption permissible through bad trade agreements. All Americans should be angered that these products are sold in the United States, where American manufacturing workers could have had good paying jobs that respect basic human dignity."

Ford 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. Ford product chief Raj Nair said in November that the automaker could add a diesel engine option on the F-150 pickup.

Ford has 11,300 employees in Mexico. The Ford Fiesta, Fusion and Lincoln MKZ as well as the hybrid versions of both are manufactured in Mexico.

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