Ford says Donald Trump influenced decision to not move production to Mexico
No U.S. jobs were at risk, but the car company's independence may be.
By Lydia DePillis
Updated 9:47 am, Friday, November 18, 2016
Late Thursday, President-elect Donald Trump took credit for what might have been a big achievement — preventing an auto plant from moving to Mexico — if it were true. But it turns out Trump did have some influence in Ford's decision to keep making Lincolns in America.
"Just got a call from my friend Bill Ford, Chairman of Ford, who advised me that he will be keeping the Lincoln plant in Kentucky - no Mexico," Trump tweeted. And then: "I worked hard with Bill Ford to keep the Lincoln plant in Kentucky. I owed it to the great State of Kentucky for their confidence in me!"
As several news outlets then reported, neither of the two plants where Ford builds cars in Kentucky were ever at risk. The company's new contract with the United Auto Workers union preserved those jobs. While Ford was considering moving production of the low-selling Lincoln MKC to its plant in Cuautilan, Mexico, it would have ramped up production of its popular Escape in Kentucky.
However, when asked whether Trump had some bearing on the decision to keep the Lincoln production in Kentucky, Ford spokeswoman Christin Baker answered: "The answer to your question is yes."
"We have been reviewing the sourcing of this product, and Bill Ford spoke to the President-elect yesterday and shared our recent decision to keep Lincoln MKC in Kentucky," Baker elaborated. "We are encouraged the economic policies he will pursue will help improve U.S. competitiveness and make it possible to keep production of this vehicle here in the U.S."
During the campaign, Trump talked about imposing high tariffs on cars coming from overseas, and repeatedly chastised Ford — often using faulty information — for moving some production to Mexico.
Even if U.S. jobs were not at stake in this particular location decision, the ability to produce vehicles in other countries has been very important to the Ford's business model, and that of other American car companies. If Detroit is no longer able to move different vehicle lines around to its various factories because of political pressure or new tariffs, it could curtail their profits, and even their ability to create more jobs in the United States.
Thus far, Ford has been resolute in its decision to move production of some small car lines to Mexico, and vocal in its opposition to an overhaul of the free trade agreement between Mexico, Canada, and the United States.
However, the company might have wanted to start off on the right foot with the Trump administration by making a small concession.
"I'm sure they're trying to make nice with Trump," says Art Schwartz, an economist and former labor negotiator with General Motors. "He is president now, so he does have a lot of influence. To start fighting with him right away would be a bad idea."
Still, it's unlikely that Trump can force Ford to open new plants in the United States, even if he imposed the kind of import barriers that he has promised. "Ford's not going to eat a 35 percent tariff," he said. "The price of the vehicles would go up, sales would go down, and jobs would be lost in the U.S."
Ford's decision may also be indicative of a broader chilling in investment in Mexico, as businesses wait to see how the rules of the road will change in the Trump administration — which could take a long time to become clear.
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