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Ford Concedes Bigger Plans for Mexico

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Ford Concedes Bigger Plans for Mexico

Business

Ford Concedes Bigger Plans for Mexico

Ford Concedes Bigger Plans for Mexico

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The automaker confirms it will invest more in Mexico. A formal announcement follows the apparent leak of an internal coporate document to Detroit-area newspapers. The memo detailed a multi-year investment strategy.

STEVE INSKEEP, host:

Let's talk about another company facing problems: Ford. It's working on a restructuring plan that includes shutting 14 plants and cutting thousands of jobs. And now it has confirmed reports about another element of the plan. It's in an internal document which is titled The Way Forward: Mexico.

The document was apparently leaked at two Detroit-area newspapers, and NPR's Jack Speer reports.

JACK SPEER reporting:

Ford officials, while saying some of the details in the recent press accounts were incorrect, did not entirely dismiss reports of an ambitious new investment plan for Mexico. For now, Ford officials will say only that the company will invest an unspecified amount of money in its existing Mexican plants. Sayeed Deep(ph) is a Ford spokesman.

Mr. SAYEED DEEP (Spokesman, Ford Corporation): In any project, there are numerous iterations and proposals. You know, what we are going to confirm is that we do intend to invest in our Mexican facilities. That's part of our Way Forward plan.

SPEER: However, Ford is denying reports Mexico has been chosen as the site of a brand new assembly plant that the automaker said back in January it would build somewhere in North America.

Kevin Tynan is a senor analyst with Argus Research. He says, while it's not clear where the new assembly plant will be built, he's not surprised Ford is looking seriously toward Mexico now.

Mr. KEVIN TYNAN (Senior Analyst, Argus Research): It's still early, and there's a lot of speculation and denials and accusations, if you will. But the fact of the matter is this is, it's a strategy that would ultimately make sense for the company.

SPEER: Analysts like Tynan say Ford desperately needs a facility where it can build small cars inexpensively, something the automaker will presumably now be getting by expanding its presence in Mexico.

Mr. TYNAN: With those smaller vehicles, those low margin vehicles, it certainly makes sense. And I think with what the labor costs and the healthcare costs are in the U.S., it's a strategy that certainly has to be explored.

SPEER: But Ford spokesman Sayeed Deep said Ford's increased commitment to Mexico doesn't mean the automaker is turning its back on the U.S.

Mr. DEEP: Ninety percent of our dollars spent are here in the United States; less than 5 percent in Mexico. And as you go forward it will remain that kind of split.

SPEER: News reports about Ford considering its options in Mexico came just as the United Autoworkers Union was holding its annual meeting in Las Vegas. UAW President Ron Gettelfinger declined to comment on the automaker's announcement.

Ford already builds its popular Fusion model in Mexico.

Jack Speer, NPR News, Washington.

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