CEO Mark Fields told investors the move is part of plans to make production simpler and less expensive
Ford focus

(Photo: SAUL LOEB, AFP/Getty Images)

Ford plans to eventually shift all North American small-car production from the U.S. to Mexico, CEO Mark Fields told investors Tuesday, even though the company's production investments in Mexico have become a lightning rod for controversy in the presidential election.

"Over the next two to three years, we will have migrated all of our small-car production to Mexico and out of the United States," Fields said at a daylong investor conference in Dearborn.

The news sparked a fresh round of criticism of Ford from Republican Presidential candidate Donald Trump, who was campaigning in Flint on Wednesday.

"We shouldn’t allow it to happen. They’ll make their cars, they’ll employ thousands of people, not from this country, and they’ll sell their car across the border," Trump said during his visit. "When we send our jobs out of Michigan, we’re also sending our tax base."

The impact on Ford's U.S. employment will be minimal in the near-term. Ford already builds the Fiesta subcompact and the Fusion mid-size sedan in Mexico. There is an expectation that Ford will build a new Ranger mid-size pickup truck in Wayne and possibly a new Bronco compact sport-utility.

The automaker also still will make the Ford Mustang at its plant in Flat Rock, Michigan and will begin making the full-size Lincoln Continental there later this year. It also makes the full-size Ford Taurus in Chicago.

Ford isn't the first automaker to move small car production out of the U.S. Mexico has become an auto production Mecca for new industry investment, surpassing Canada in annual automotive production.

Fiat Chrysler Automobiles said earlier this year it will end production of all cars in the U.S. by the end of this year as it discontinues production of the Dodge Dart in Belvidere, Ill., and the Chrysler 200 in Sterling Heights, Mich.

Fields' announcement wasn't much of a surprise. Ford said in April it would invest $1.6 billion to build a new plant in Mexico and create 2,800 jobs so it can build small cars there. Ford also said in 2015 that it planned to move production of its Ford Focus and C-Max hybrids cars from a plant in Wayne, Mich., to another country by 2018.

It's an ironic twist for the Wayne because Ford spent $550 million in 2010 to convert the aging plant from a big SUV factory to one that could build the efficient Focus compact car.

The industry has known for decades that domestic manufacturers struggle to make a profit on small cars in the U.S.

In recent years, automakers that include General Motors, Honda, Hyundai, Nissan, Mazda, Toyota and Volkswagen have announced plans to either expand existing plants or build new ones in Mexico. Fiat Chrysler Automobiles also has said it is considering an expansion of its production there.

The number of auto jobs in Mexico reached 675,000 last year, a 40% increase from 2008. U.S. auto jobs increased 15% over the same period to more than 900,000, according to the Center for Automotive Research in Ann Arbor.

In addition to the North American Free Trade Agreement, automakers are also drawn to Mexico because of its lower wages, trade agreements with 44 other countries, a robust rail and shipping infrastructure and a workforce that has proven it can make high-quality cars.

Ford's decision to shift the assembly of small cars to Mexico can reduce costs to a point. But some of these cars are over-engineered.

For example, Fields said the current Ford Focus can be ordered in 300 different configurations of options and colors. Ford wants to reduce that to 30, which will make the production process simpler and less expensive.

Americans prefer larger vehicles, especially pickups and higher-riding SUVs and crossover vehicles for their personal use.

UAW President Dennis Williams also has repeatedly blasted Ford and other automakers for investing so much money in Mexico.

There is no reason, mathematically, to go ahead and run to countries like Mexico, Thailand and Taiwan, Williams said earlier this year. "We all recognize there is a huge problem in Mexico. So we have to address it as a nation. The UAW cannot do it alone. We are not naive."

Unifor, the Canadian union that represents autoworkers, also is struggling to hold on to its automotive industry. It is currently in negotiations with the Detroit Three over a contract that expires on Monday. Unifor is worried that three plants could close in the coming years if automakers refuse to commit to new investments.

Ford has said it continues to invest heavily in its U.S. plants and isn't cutting jobs here. Last fall, the automaker made a commitment to invest $9 billion in U.S. plants and create or retains more than 8,500 jobs as part of a new four-year contract with the UAW. Of that, $4.8 billion goes to 11 facilities in Michigan.

Ford is reassessing much of its business to prepare for a future when it needs to make cars for new modes of transport, to generate money from shared use, all without jeopardizing profits still generated by many of its cars and trucks.

The future of smaller cars in the U.S. may depend on the ability to electrify their powertrains and introduce them to ride-sharing fleets where they can generate revenue from fares paid by multiple riders.

Along those lines, Fields and other Ford executives Wednesday outlined an aggressive plan to invest $4.5 billion over the next four years in new battery-powered models in such segments as commercial vehicles, trucks, SUVs and performance vehicles.

Ford also reiterated its commitment to developing an autonomous vehicle by 2021 for use in a ride-hailing service. The company believes that autonomous vehicles could account for up to 20% of vehicle sales by 2030.

►Related: A safe, VERY safe ride in a self-driving Ford Fusion
►Mark Fields: Why Ford's purchase of shuttle service made sense

Investors didn't reward Ford or other U.S. automakers when they posted record profits last year and early this year. Now that U.S. sales are leveling off Wall Street is even less enthusiastic about the sector. Ford shares have fallen 12% from the beginning of the year from $14.09 to Tuesday's closing price of $12.38.

Fields spent the first half of his 45-minute presentation assuring analysts that Ford's core business remains strong, especially in its most profitable segments such as full-size pickup trucks, commercial vans and its resurgent Lincoln luxury brand.
Mark Fields, Ford CEO.

Mark Fields, Ford CEO. (Photo: Ford Motor Company)

But he also said the company must respond to a global shift away from personal vehicle ownership to one in which personal ownership will be challenged by on-demand shared mobility.

►Related: Ford to woo Wall Street with tech skills, investments

In exploring how a traditional manufacturer can profit in a market where the vehicle becomes a service platform, Fields said the first question he and fellow executives had to define is "What’s our point of view on autonomy?"

Contact Greg Gardner: 313-222-8762 or ggardner@freepress.com. Follow him on Twitter @GregGardner12. Free Press staff writer Kathleen Gray contributed.

 Skinnereal wrote:
Vote with your wallets as well as in the booths.

Relapse wrote:

I love the whole "buy American" line of bs these companies put out while they all the time ship jobs out of the country.

Relapse wrote:
I boycotted Ford long ago after I found out that through a Russian plant, they were cranking out military vehicles for North Vietnam during the war over there.

 BigWaaagh wrote:
Votes aren't going to bring those jobs back. Not a chance.
The rage and delusion of many Trump supporters with the whole "Make America Great Again" crap is borderline Jonestown-ian in it's Kool-Aid influence. The logic being that, what, Trump gets elected and suddenly all those shuttered factories in the Rust Belt come bustling back to life with droves of highly(over-) compensated union workers working assembly lines in some version of a romantic, post-WWII fantasy America? Ridiculous.
I've lived long enough to see the rotation of "Made in Japan", "Made in Taiwan", "Made in China", "Made in Viet Nam", "Made in India", "Made in Mexico"...and it's lead to a global lift of people out of poverty, which, besides creating a significantly overall better quality of life for huge swaths of the people of the world, has opened enormous markets of newly affluent middle classes to our exports. Yes, contrary to the click-bait pablum out there, America exports a significant amount of goods and services around the world...largest exporting country by 2014 stats and I think we're just behind China for 2015 due primarily to $ appreciation vs the Renminbi...afforded by the effects of the globalization that suddenly is chic to bash in certain political circles by those afraid to speak the truth of the story.
As to the Ford move, they're just part of the Mexican manufacturing and industrial boom going on south of our border. Which, if I was a right wing xenophobic loon, I might want to view as a good thing because the more affluent Mexico becomes, the less "rapists, criminals...blah, blah, blah" they'll send across our borders and the more tourists with $$$ in their pockets that will suddenly be visiting. Mexico with a vibrant economy means a stable, less crime ridden Mexico. A less crime ridden Mexico means less concern for the borderphobes, one would think.


Interesting global stats below from the World Bank on exactly this. Stats show comparison from 1960-2015, btw, US exports as %GDP rose during that period from 5% to 13%.

http://data.worldbank.org/indicator/NE.EXP.GNFS.ZS

 Frazzled wrote:
You want to buy American? Buy a Honda or Nissan. The domestic (and by that I mean US) content is substantially higher and they are typically classed as "domestic" for origin purposes. My boy's Honda is over 90% domestic content when the Ford Taurus was just a hair over 50%.

 Ouze wrote:

Relapse wrote:
I boycotted Ford long ago after I found out that through a Russian plant, they were cranking out military vehicles for North Vietnam during the war over there.

Do you have a source for this? I'd never heard this before and I can't immediately find a cite.

And as to what Frazzled said, I have a Honda. Someone once gave me gak about having a foreign car.. but my car was built in Ohio.

I've lived long enough to see the rotation of "Made in Japan", "Made in Taiwan", "Made in China", "Made in Viet Nam", "Made in India", "Made in Mexico"...and it's lead to a global lift of people out of poverty, which, besides creating a significantly overall better quality of life for huge swaths of the people of the world

 reds8n wrote:
The Ford thing sounds suspiciously like a garbled updating of their WW II activities.

Or maybe their stuff with the Soviets in the 30s.

 Frazzled wrote:

 BigWaaagh wrote:
Votes aren't going to bring those jobs back. Not a chance.
The rage and delusion of many Trump supporters with the whole "Make America Great Again" crap is borderline Jonestown-ian in it's Kool-Aid influence. The logic being that, what, Trump gets elected and suddenly all those shuttered factories in the Rust Belt come bustling back to life with droves of highly(over-) compensated union workers working assembly lines in some version of a romantic, post-WWII fantasy America? Ridiculous.
I've lived long enough to see the rotation of "Made in Japan", "Made in Taiwan", "Made in China", "Made in Viet Nam", "Made in India", "Made in Mexico"...and it's lead to a global lift of people out of poverty, which, besides creating a significantly overall better quality of life for huge swaths of the people of the world, has opened enormous markets of newly affluent middle classes to our exports. Yes, contrary to the click-bait pablum out there, America exports a significant amount of goods and services around the world...largest exporting country by 2014 stats and I think we're just behind China for 2015 due primarily to $ appreciation vs the Renminbi...afforded by the effects of the globalization that suddenly is chic to bash in certain political circles by those afraid to speak the truth of the story.
As to the Ford move, they're just part of the Mexican manufacturing and industrial boom going on south of our border. Which, if I was a right wing xenophobic loon, I might want to view as a good thing because the more affluent Mexico becomes, the less "rapists, criminals...blah, blah, blah" they'll send across our borders and the more tourists with $$$ in their pockets that will suddenly be visiting. Mexico with a vibrant economy means a stable, less crime ridden Mexico. A less crime ridden Mexico means less concern for the borderphobes, one would think.


Interesting global stats below from the World Bank on exactly this. Stats show comparison from 1960-2015, btw, US exports as %GDP rose during that period from 5% to 13%.

http://data.worldbank.org/indicator/NE.EXP.GNFS.ZS

None of that means gak when you watch your entire way of life get exported to another country. I've seen it up close and personal. Nothing says "this is gak" like trying to keep your dad from shooting himself because everything he did is gone, just gone and he'd been out of work for YEARs.

 Frazzled wrote:

 BigWaaagh wrote:
Votes aren't going to bring those jobs back. Not a chance.
The rage and delusion of many Trump supporters with the whole "Make America Great Again" crap is borderline Jonestown-ian in it's Kool-Aid influence. The logic being that, what, Trump gets elected and suddenly all those shuttered factories in the Rust Belt come bustling back to life with droves of highly(over-) compensated union workers working assembly lines in some version of a romantic, post-WWII fantasy America? Ridiculous.
I've lived long enough to see the rotation of "Made in Japan", "Made in Taiwan", "Made in China", "Made in Viet Nam", "Made in India", "Made in Mexico"...and it's lead to a global lift of people out of poverty, which, besides creating a significantly overall better quality of life for huge swaths of the people of the world, has opened enormous markets of newly affluent middle classes to our exports. Yes, contrary to the click-bait pablum out there, America exports a significant amount of goods and services around the world...largest exporting country by 2014 stats and I think we're just behind China for 2015 due primarily to $ appreciation vs the Renminbi...afforded by the effects of the globalization that suddenly is chic to bash in certain political circles by those afraid to speak the truth of the story.
As to the Ford move, they're just part of the Mexican manufacturing and industrial boom going on south of our border. Which, if I was a right wing xenophobic loon, I might want to view as a good thing because the more affluent Mexico becomes, the less "rapists, criminals...blah, blah, blah" they'll send across our borders and the more tourists with $$$ in their pockets that will suddenly be visiting. Mexico with a vibrant economy means a stable, less crime ridden Mexico. A less crime ridden Mexico means less concern for the borderphobes, one would think.


Interesting global stats below from the World Bank on exactly this. Stats show comparison from 1960-2015, btw, US exports as %GDP rose during that period from 5% to 13%.

http://data.worldbank.org/indicator/NE.EXP.GNFS.ZS

None of that means gak when you watch your entire way of life get exported to another country. I've seen it up close and personal. Nothing says "this is gak" like trying to keep your dad from shooting himself because everything he did is gone, just gone and he'd been out of work for YEARs.

 Frazzled wrote:
You want to buy American? Buy a Honda or Nissan. The domestic (and by that I mean US) content is substantially higher and they are typically classed as "domestic" for origin purposes. My boy's Honda is over 90% domestic content when the Ford Taurus was just a hair over 50%.

 d-usa wrote:

 Frazzled wrote:
You want to buy American? Buy a Honda or Nissan. The domestic (and by that I mean US) content is substantially higher and they are typically classed as "domestic" for origin purposes. My boy's Honda is over 90% domestic content when the Ford Taurus was just a hair over 50%.

That's been my version of "buying American".

I don't care where the ultimate corporate profits end up, I'll buy from American workers. If the "foreign" car is simply a foreign company building domestically and employing domestic workers, they get my dollars. I don't buy "American" if all it means is an American executive getting the profit from a car build in a foreign country by foreign workers.

That and quality. I refuse to buy a crap product just to wrap myself in a "buy American" flag.

 ZebioLizard2 wrote:

I've lived long enough to see the rotation of "Made in Japan", "Made in Taiwan", "Made in China", "Made in Viet Nam", "Made in India", "Made in Mexico"...and it's lead to a global lift of people out of poverty, which, besides creating a significantly overall better quality of life for huge swaths of the people of the world

While that's good for everyone else.. How exactly is that creating a better quality of life for the people still living here?

 BigWaaagh wrote:

 ZebioLizard2 wrote:

I've lived long enough to see the rotation of "Made in Japan", "Made in Taiwan", "Made in China", "Made in Viet Nam", "Made in India", "Made in Mexico"...and it's lead to a global lift of people out of poverty, which, besides creating a significantly overall better quality of life for huge swaths of the people of the world

While that's good for everyone else.. How exactly is that creating a better quality of life for the people still living here?

It's really not a matter of "...the people still living here?", or there, or anywhere for that matter. And understand, I'm not being cold to the plight of people affected by this, but this is the nature of capitalism. Money seeks opportunity and companies seek the best return for their shareholders, period. Labor, particularly low skilled, is being exported by every country...lots of European and Asian auto makers down in Mexico!...or is being replaced through technology. I'm sure in upcoming years we'll hear about those factories currently being built in Mexico becoming more and more automated and the Mexican workers being laid off.
So a bit more directly to your point, as I mentioned in my previous point, the exportation of jobs creates wealth in a country that usually is in dire need of it...hence the abundance of cheap labor...and that creates a middle class with money to spend, and an opportunity to sell into with our products and services. That means jobs and services here, selling over there. That means less expensive goods available here. That means opportunity in higher paying fields over here, i.e. lawyers, accountants, engineers, architects that can now market their expertise to this growing economy created by the growth/establishment of a healthy, upwardly mobile base now in need of those services.

 loki old fart wrote:
Stick an import tax on them, so it's cheaper to make them at home. sorted
It always amazes me, that manufacturers think they can produce cheaper abroad, And still sell at home, to people without jobs.

 loki old fart wrote:
Stick an import tax on them, so it's cheaper to make them at home. sorted
It always amazes me, that manufacturers think they can produce cheaper abroad, And still sell at home, to people without jobs.

 d-usa wrote:

 Frazzled wrote:
You want to buy American? Buy a Honda or Nissan. The domestic (and by that I mean US) content is substantially higher and they are typically classed as "domestic" for origin purposes. My boy's Honda is over 90% domestic content when the Ford Taurus was just a hair over 50%.

That's been my version of "buying American".

I don't care where the ultimate corporate profits end up, I'll buy from American workers. If the "foreign" car is simply a foreign company building domestically and employing domestic workers, they get my dollars. I don't buy "American" if all it means is an American executive getting the profit from a car build in a foreign country by foreign workers.

That and quality. I refuse to buy a crap product just to wrap myself in a "buy American" flag.

 ZebioLizard2 wrote:

I've lived long enough to see the rotation of "Made in Japan", "Made in Taiwan", "Made in China", "Made in Viet Nam", "Made in India", "Made in Mexico"...and it's lead to a global lift of people out of poverty, which, besides creating a significantly overall better quality of life for huge swaths of the people of the world

While that's good for everyone else.. How exactly is that creating a better quality of life for the people still living here?

 Frazzled wrote:
Thats the argument, hwoever our trade balances with these countries have done nothing but deteriorated. In actuality wealth is transferred. A small group benefits but the majority do not.

 Necros wrote:
I had a 2010 Ford Escape. It was great at first, but eventually had so many problems and kept nickel-and-diming me till I got rid of it this past xmas.. The radio only worked when it wanted to and it was some crazy custom ford radio that would cost $1000 to fix. I always had a tire pressure warning light even though my tires were perfect, even got brand new tires and that didn't fix it. And the last straw was when my trunk decided it didn't feel like opening anymore. Apparently, Ford used some crap insulating window stuff on the back windows which leaked every time it rained.. not a big leak, but I always had faint water streaks going down the back window that I always had to clean. Turns out that water was dripping down into the lock mechanism and it rusts it away till it breaks and one day you just can't open it anymore. It was a known issue and I found plenty of youtube videos telling me how to fix it myself, but I didn't care anymore.

So I traded it in for a 2015 Jeep Renegade. Lots of fun to drive, no problems yet.. was built in italy, and i'm italian, so that's OK by me. What I really wanted was a Chrysler 300, but my girlfriend wouldn't let me buy an "old person car"

Best and most reliable car I ever owned was a 2004 Honda Element.