Ford's Plans in Mexico Have Nothing to do With Donald Trump

Here's the news from Ford:

The automaker also said it is canceling plans for a new $1.6 billion plant in San Luis Potosi, Mexico, but confirmed that the next-generation of its Focus compact will be produced at its Hermosillo, Mexico factory.

Ford CEO Mark Fields said the decision to cancel the plant in Mexico was based in part on changing market conditions with sales of small cars declining as well as the pro-business climate the automaker expects under incoming President Donald Trump. "This is a vote of confidence for president elect Trump and some of the policies he may be pursuing," Fields at the plant today.

The real reason this is happening is that Ford has suffered sales declines in its Fusion sedan, which is made at its Mexico plant, as well as sales declines in the Mustang, which is made in Flat Rock, Michigan. There's not much point in building a new small-car plant anywhere if Fusion sales are down, and not much point in underutilizing its Flat Rock plant.

And it's not as if Ford is moving any production from Mexico to the United States. All it's doing in Flat Rock is some expansion to build self-driving and electric vehicles. This involves a grand total of 700 jobs, which were never going to be in Mexico in the first place.

In other words, this was a pure business decision. So why is Mark Fields giving Trump a big shout out? Because he figures there's no harm in spinning this into flattery of the incoming president. It might help and it can't hurt.

But it ain't so. Ford sales of sedans and small cars are tanking. If they were doing better, they'd still be building that new plant in Mexico.