Ford’s series of announcements today came with one shocker. The company is cancelling their plans to build a $1.6 billion plant in Mexico and is instead investing $700 million on an expansion of a plant in Michigan. President-elect Donald Trump was quick to take credit, but was it his doing or just writing on the wall?
The Timing of the Announcement
When it was first announced, some speculated that Trump had inside knowledge of the deal and that’s why he tweeted what he did at General Motors earlier this morning. Ford quickly debunked that after the press conference.
Fields called Trump and Pence to tell them the news this morning. They were called after Trump tweeted about GM.
— Michael Martinez (@MikeMartinez_AN) January 3, 2017
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So while it is a heck of a coincidence, it appears to be just that.
Was Trump Involved?
We all know that Trump has been saying for awhile that he plans on taxing imported vehicles for sale in the United States. Since we are reporting this after his election, it would appear that Ford is keen on staying on the good side of the President-elect.
Ford CEO Mark Fields on CNBC ties change in Mex plans to lower car demand, not Trump: "It became very clear that we didn't need this plant."
— Nick Bunkley (@nickbunkley) January 3, 2017
So while on the surface it would seem that Trump’s plans for NAFTA are part of the reason, it might not be entirely the case.
— Donald J. Trump (@realDonaldTrump) January 3, 2017
Car sales have been slumping for a long time. People are going crossover crazy. If Ford is losing sales on the cars it currently has, it wouldn’t make a lot of sense on spending a huge amount of money on a plant — anywhere — to build something people don’t want.
Obviously decisions aren’t made in a vacuum, and it’s likely that President-elect Trump did factor into the consideration, it’s not as big of a factor as it might appear on the surface.