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Ford Clashes with Donald Trump on Production in Mexico

November 23, 2016

Ford Clashes with Donald Trump on Production in Mexico

Ford's newest EcoSport model, which is set to be the most compact SUV available in the automaker's line-up, could be one of the most controversial vehicles slotted for release. Ford has said that it is planning on rolling the vehicle off of the assembly line in India instead of the United States. The manufacturer is already making plans to move a number of its smaller passenger productions from United States operations to facilities in Mexico, which is a decision that is strongly opposed by America's president-elect Donald Trump, who has warned that he plans on taking further steps to block off Ford from importing a number of Mexican-made passenger cars under the suggestions of hefty tariffs. 

Ford is not the only automaker that may be impacted by such anti-import laws, as there are a number of automakers that rely on existing production facilities in Mexico or are planning on building new plants there. Toyota had recently broke ground as well by planning for new assembly facilities in Apaseo el Grande, which is in Guanajuato. Toyota is planning on producing the Corolla, which is the one of the best-selling vehicles in the entire world, particularly in the United States. With Trump not yet in office, there is still a large amount of uncertainty surrounding the situation. 

Ford is so far showing no signs of withdrawing their plans from Mexico. The automaker's chairman and the great-grandson of Henry Ford had met with Donald Trump in order to discuss terms with the previous candidate in order to try to convince the president-elect of why he believed the decision was a poor one. Insiders reported that the conversations did little to settle the debate, and the new development of the EcoSport may only act as fuel to fan the fires, bringing Trump's attention back to the matter at hand once the president-elect officially takes office later on. 

Sources close to the automaker had said that Ford is not intentionally waving a red flag, and instead wants to get out a new product segment as soon as is possible. They had said that the decision to invest in such a vehicle was already made a very long time ago. It was made with Ford's footprint and vehicle planning in mind and not as an attack on Donald Trump. Joe Phillippi, who is the acting head of the Auto Trends Consulting company, had said that he hopes the dispute can eventually die down, but he fears that the announcement of the EcoSport could bring the subject back up.

Though the issue is a sensitive one, analysts believe that the EcoSport announcement could actually widen the scope of the trade debate for automakers. Ford also plans to be the first automaker to sell Indian-made cars in the United States. Numerous other Indian companies have made relevant plans to begin selling, but few have gotten the chance to begin pushing their production into the United States.

The biggest issue of the trade debate revolves around China, however. The country has already run a tremendous trade deficit with the United States, and it has numerous restrictions in place in order to better discourage importing vehicles. As a result, almost every major global automaker has set up their operations in China. It was not until recently that the industry numbers had begun to slip into the single digits, which encourages Chinese and other foreign-owned carmakers to begin looking for other export opportunities to keep up with the market. Automakers are uncertain about the future regarding potential policies that could be developed by the new president-elect.