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September 15, 2016

Trump rebukes Ford’s small car Mexico plan

Ford CEO Mark Fields has said all of the automaker's small car production would be leaving US plants and heading to lower-cost Mexico, drawing another rebuke from Republican presidential candidate Donald Trump.

Ford CEO Mark Fields has said all of the automaker's small car production would be leaving US plants and heading to lower-cost Mexico, drawing another rebuke from Republican presidential candidate Donald Trump.

"We will have migrated all of our small-car production to Mexico and out of the United States," over the next two to three years, Fields told Wall Street analysts at an investor conference hosted by the automaker, Reuters reported.

Trump, campaigning in Flint, Michigan, called Ford's decision "horrible." He has criticised Ford's Mexican investments for more than a year and vowed to pressure the automaker to reverse course if elected.

"We shouldn't allow it to happen," Trump said.

Fields has previously responded to Trump's criticism by saying that as a global company Ford must compete by making solid business decisions.

Earlier this year, Ford said it would spend US$1.6bn in Mexico for small-car production to start in 2018.

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During contract talks in 2015, Ford confirmed that it would move Focus and C-Max production out of its Wayne, Michigan, plant in 2018. The United Auto Workers Union said at the time that Ford planned to build the next Focus in Mexico.

A source briefed on the matter told Reuters the shift of production to Mexico was expected to take place next year before the start of the 2018 model year.

In April, Ford reiterated that it was planning to build two new vehicles at the Wayne plant beginning in 2018. Analysts have said they expect Ford to build a new Bronco SUV and Ranger pickup there.

Fields said that Ford planned to shift a majority of its small car production around the world to low-cost countries by 2019, which could also affect its western European car production. It also makes small cars in Thailand for Asia Pacific markets.

Both automakers are making the moves because US consumers have turned away from traditional sedans and hatchbacks to SUVs and pickup trucks, Reuters noted.

The United Auto Workers has said the number of auto assembly jobs would not decline because workers would be busy making SUVs and pickup trucks.

However, UAW president Dennis Williams has said there was a risk that if petrol prices rose again above US$4 per gallon as in mid-2008, consumers might once again favour smaller cars.

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