Ford to build new small-car plant in Mexico

Ford Motor Co. plans to build a new $1.6 billion US auto assembly plant in Mexico, creating about 2,800 jobs and shifting small-car production from the U.S. at a time when moving jobs south of the border has become a major issue in the U.S. presidential campaign.

The company announced the plant in the San Luis Potosi state Tuesday without saying specifically what cars it will build there. But the United Auto Workers union has said Ford plans to shift production of the Focus compact and C-Max small gas-electric hybrid from suburban Detroit to Mexico, where the cars can be made at lower cost and more profitably.

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The UAW's new four-year contract with Ford, signed last year, guarantees new vehicles for the Wayne, Michigan, assembly plant and a $700 million investment that preserves the plant's 3,924 jobs. Union members have said they expect the factory to get a new version of the Ranger small pickup and a new small SUV called the Bronco.

The announcement came on the day of the key Wisconsin primary and drew a strong response from Republican front-runner Donald Trump, who called Ford's move "an absolute disgrace." Trump has railed about corporate America moving jobs to Mexico to take advantage of what he calls a lopsided trade deal and has vowed to rewrite the 1994 North American Free Trade Agreement, tax imports and punish U.S. companies including Ford.

Trump said in a statement that transactions like Ford's will not happen when he is president. "Cheap goods are not cheap when you consider the cost of lower wages and higher unemployment," he said, adding that he would enforce trade rules and reduce the incentive for companies to send business elsewhere.

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In response, Ford highlighted its investments in the U.S., saying that the company spends more than 80 per cent of its capital in the U.S. and has committed to spending another $8 billion to $9 billion in the next four years.

"Since 2011 we've invested over $10 billion in our facilities. We've hired over 25,000 people" in the U.S., CEO Mark Fields said last month at the New York auto show.