It says the savings it will make will be greater than any tax or tariff that Trump can introduce...
Ford’s new chief executive, Jim Hackett has taken his first significant public decision by deciding not to build new cars in Mexico, using the group’s existing plant in Chongqing, China instead.
This means that from 2019, all Focus models purchased in the US will be made in China, not Michigan. This will be the first time in the history of the company that it will sell cars from China in the US.
The company says it will save up to $1bn in capital investment, which will more than compensate for any import duties the Trump administration may introduce.
It also maintains that it’s not worried about US consumers shunning Chinese manufactured cars. Ford points to the fact that most Apple smartphones are made in the same jurisdiction. It believes that consumers are more interested in the quality of products than where they are made.
The existing Michigan plant will be used to make the larger Ford Ranger pickup and Ford Bronco SUV models and this move will not result in the loss of any jobs in the US.
Ford has also announced plans to invest $900m upgrading its Louisville truck factory.