Ford announced this week that it’s building a new auto factory in Mexico, which union leadership says is part of the company’s plan to resume building the Ranger and Bronco for the U.S. market.
Republican presidential candidate front-runner Donald Trump condemned Ford’s decision which he says is part of an ongoing jobs exodus that will continue to drive down wages in the U.S. and increase unemployment.
Ford said Tuesday that its $1.6 billion assembly plant will be built in the San Luis Potosi state where it’s expected to generate 2,800 jobs and take-over production of some of the company’s small cars which are currently being produced in the U.S., according to the Associated Press.
While Ford did not reveal which of its small cars would be built at the Mexican plant, the United Auto Workers union reported that the Focus compact and C-Max hybrid, which is currently being produced in Detroit, will be built there. Shifting production south of the border will increase profitability, the UAW said.
The UAW reported last year that they expect to be building a new Ranger and Bronco for the U.S. market at the assembly plant in Wayne, Michigan. In a contract inked with Ford last year, the automaker agreed to invest $700 million into the Michigan plant which will reportedly save 3,924 jobs.
Bloomberg reported in August last year that U.S. production of a new Ranger and Bronco may begin in 2018. The Ford Bronco was produced from 1966 to 1996, and the Ford Ranger was manufactured from 1982 to 2011 in the U.S.
Trump said Ford’s decision to build the San Luis Potosi plant was “an absolute disgrace.”
Trump has been critical of businesses that have moved operations to other countries, particularly through the 1994 NAFTA agreement, which the U.S. signed with Mexico and Canada. He contends that the agreement provides unfair trade advantages which entices U.S. companies to move operations elsewhere, especially to Mexico, where wages are much cheaper than in the U.S.
Trump says NAFTA has lowered wages in the U.S. and resulted in troubling job losses. He said if elected president he will alter the NAFTA agreement so that it will prove financially punitive for U.S. companies that continue to operate under the original 1994 agreement.
Ford responded to Trump’s criticism by pointing out that it continues to invest heavily in the U.S. The company says that it spends more than 80 percent of its capital in the U.S. and over the next four years it plans on spending $8 billion to $9 billion more.
The UAW appears to be in lock-step with Trump’s criticism of Ford and other companies that turn to low-wage nations like Mexico for auto production and then import those vehicles into the U.S.
“This is a broken system that needs to be fixed,” Union President Dennis Williams said.