Ford Motor Co. is changing gears again on its production plans in Mexico, revealing it now plans to build a small electric-powered sport utility vehicle south of the border instead of at a Michigan factory.
Sending the electric vehicle to Mexico, where labor costs are lower, will help the business case for the costly model. It also risks raising the ire of President Donald Trump, who had been sharply critical of an earlier plan by Ford to build a small car factory in Mexico that the company ultimately canceled.
Moving production of the electric SUV to Mexico will allow the carmaker to boost production of self-driving vehicles at its factory in Flat Rock, Michigan, according to its plans revealed late Wednesday. The Wall Street Journal reported the Mexico news earlier.
Ford is boosting its investment by $200 million and adding 150 more jobs to the Michigan plant as part of the shift, Mark Truby, the company’s communications chief, said in an email. The driverless car is to debut in 2021.
The SUV to be built in Mexico starting in 2020 will go 300 miles on a single charge and is the centerpiece of a planned $4.5 billion overhaul of Ford’s lineup to add 13 electric or hybrid models. Ford has been viewed by Wall Street as playing catch-up to rivals such as Tesla Inc. and General Motors Co., which already sells the battery-powered Chevy Bolt and plans to introduce robot taxis in 2019.
Ford’s new CEO, Jim Hackett, has been accelerating the automaker’s moves in electric and autonomous cars, while announcing $14 billion in cost costs to improve what he calls the company’s “fitness.” After replacing Mark Fields as CEO in May, one of Hackett’s first moves was to shift a plan to make the Focus small car in Mexico to one of the automaker’s plants in China.
The self-driving car Ford will build in Michigan will be a commercial vehicle specifically designed for ride-hailing and delivery services, Jim Farley, executive vice president of global markets, wrote in a Medium post Wednesday. The automaker will begin testing the car in an unnamed city next year.
“Next year will be an important time for us as we begin to test both our self-driving technology and business model in a variety of pilot programs in the first city in which we plan to operate an autonomous vehicle business,” Farley wrote. Ford’s autonomous business will “serve leading companies, such as Lyft, in the movement of people and goods.”
By Keith Naughton