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Ford makes u-turn on plans for Mexico plant after Donald Trump tweet

GM shares fell by about 1% immediately after the tweet.

The Chevrolet Cruze hatchback.
The Chevrolet Cruze hatchback.
Image: AP/Press Association Images

Updated 9.19pm 

FORD SCUTTLED A plan to build a new factory in Mexico following criticism from Donald Trump, and just hours after the president-elect attacked General Motors for importing Mexican-made cars into the US.

Following months of criticism from Trump for its investments in Mexico, Ford said it was spiking a plan to build a new $1.6 billion plant in San Luis Potosi, and would instead invest $700 million over the next four years to expand its Flat Rock Assembly Plant in Michigan to build electric and self-driving vehicles.

Ford chief executive Mark Fields said the second-biggest US automaker was hopeful Trump’s policies will boost the US manufacturing environment.

“It’s literally a vote of confidence around some of the pro-growth policies that he has been outlining and that’s why we’re making this decision to invest here in the US and our plant here in Michigan,” Fields told CNN.

For its part, General Motors hit back at some of Trump’s claims.

Trump today tweeted that GM was sending a Mexican-made model of its Chevy Cruze to the US tax-free. He told the company to “Make in U.S.A.or pay big border tax!”.

GM, which sold 9.71 million cars and trucks last year, said that tweet simply wasn’t true as it makes the vast majority of Cruzes in Lordstown, Ohio, near Cleveland.

GM imports only hatchback versions of the Cruze from a factory in Ramos Arizpe, Mexico, and it amounts to only a small percentage of the 172,000 Cruzes sold by GM through November, spokesman Patrick Morrissey told Associated Press. The hatchback is built in Mexico for global distribution, he added.

GM shares fell by about 1% immediately after the tweet, but had bounced ahead of the opening bell, before receding slightly.

Cruze hatchback production amounts to less than a day of output at the Lordstown plant, said Glenn Johnson, president of a United Auto Workers union local at the factory. The union, he said, is not protesting the move to build the hatch in Mexico.

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“It makes for news, that’s all,” Johnson said of Trump’s tweet. The Lordstown factory, he said, is not equipped to build the hatch.

While GM says it did import some larger Cruze models last year to meet demand, that has stopped and all sedans sold in the US are now made in Ohio.

Trump vowed on the campaign trail to impose a 35% import duty on cars produced in Mexico, and he has also pledged to tear up the North American Free Trade Agreement with Canada and Mexico. Last year Trump went after Ford for plans to shift production of the Focus to Mexico. Jobs at the Detroit-area factory that now makes Focuses would be preserved.

The tweet comes as House Republicans get set to vote on a proposal to take ethics oversight away from an independent group and give the authority to the lawmakers themselves.

- With reporting by © – AFP 2016

Read: ‘So much for draining the swamp’: Republicans take independence from independent ethics body

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