Ford scraps Mexico plant, invests heavily in Michigan

January 3, 2017

Ford Motor Company [NYSE: F] announced today that it will spend $700 million to turn its Flat Rock, Michigan, assembly plant into a hub for electric and self-driving vehicle assembly.

Separately, the automaker says that it is canning a $1.6 billion new plant it had intended to build in Mexico.

Sources close to the automaker reportedly told media gathered this morning in Flat Rock, a suburb of Detroit, that the decision to allocate investment in Michigan and not Mexico was not due to negotiations with the incoming Donald Trump administration. However, Ford executives spoke with Trump this morning to inform the president-elect and his team ahead of the automaker's formal announcement.

MORE: Details on Ford's hybrid and electric push

The investment in Michigan will create 700 new jobs there, Ford says. It did not say how many jobs were planned for the now-canceled plant in San Luis Potosi, Mexico. However, Ford is by no means exiting vehicle assembly in Mexico; it confirmed today that its next-generation Focus compact car will be built there, at its plant in Hermosillo, Mexico. 

The Flat Rock plant currently builds the Ford Mustang and Lincoln Continental, but it will soon also operate as something of a hub for hybrid, electric, and autonomous cars. Ford announced today that three new products will be built in Flat Rock soon:

  • In 2020, an all-electric small SUV/crossover to be sold in North America, Europe, and Asia.
  • In 2020, a hybrid version of the Ford Mustang sports coupe
  • In 2021, a self-driving hybrid vehicle designed for ride-sharing and taxi use. 

While Ford has so far remained mostly mum about these vehicles' details, they are part of a $4.5 billion investment in electric and hybrid tech to be spread across several facilities.

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