Ford Motor Co. said Friday it will spend $2.5 billion to expand
its manufacturing presence in Mexico, the latest in a wave of auto
investments flowing to the U.S.'s neighbor to the south.
The Dearborn, Mich. auto maker plans to invest $1.3 billion to
add engines and expand its plant in Chihuahua and another $1.2
billion on a transmission plant in Guanajuato. The move is expected
to add 3,800 jobs to Ford's global payroll.
Ford already has a number of factories in Mexico, including
plants building the Ford Fiesta subcompact and Ford Fusion and
Lincoln MKZ sedans.
Over the last few years, Mexico has emerged as a major
manufacturing hub. With more than 40 different free trade
agreements, the country is drawing billions of dollars of
investments from car makers like Nissan Motor Co., General Motors
Co. and Volkswagen AG--often at the expense of creating jobs in the
U.S. and Canada. Mexico's low wages and improved logistics have
also made the country more competitive on the global stage,
transforming it fourth-largest export of cars and trucks, behind
Germany, Japan and South Korea.
Toyota earlier this week announced it would spend around a $1
billion to build a factory in Mexico, its first major production
expansion in three years. That factory will build about 200,000
Corolla compact cars a year.
Ford had previously said it wants to bring production of its
1.5-liter and 1.6 liter, 4-cylinder engines to North America for
the first time. Those engines are now built in the U.K. and China
and are commonly used in the Ford Fusion and Escape sport-utility
vehicle, which account for more than a half-million in annual sales
in North America.
Officials in Canada had lobbied for the Ford investment but
couldn't muster the incentives need to draw the work. Ford has two
engine plants in Windsor, both making V8 engines, which are going
out of favor because Ford has invested in turbocharged V6 engines
for better fuel economy.
The move comes Ford, GM and Fiat Chrysler are about to head into
contract negotiations with the United Auto Workers union this
summer. Securing new jobs and factory work the U.S. for the union's
135,000 workers will be a key topic at the bargaining table.
Despite Mexico's rising competitiveness, the U.S. continues to
be a magnet for auto investments. This year, General Motors Co.
plans to spend as much as $185 million to move production of its
Cadillac SRX crossover to the U.S. from its factory in Arizpe,
Mexico, helping it retain about 1,800 jobs.
Chinese-owned Volvo Car Corp. also chose the U.S. over Mexico
last month when it announced it would invest $500 million to build
a new auto factory in the states.
Write to Christina Rogers at christina.rogers@wsj.com
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