President-elect Trump and green jobs advocates rarely find themselves on the same side. Today is an exception. All it seems to have taken was a little trolling.
Ford Motor Company said this morning that it’s spending $700 million to expand its Flat Rock, Michigan, plant to develop a new generation of electric and autonomous vehicles. The expansion will add 700 production jobs, according to the company's official announcement.
Ford is also scrapping plans to open a new $1.6 billion factory in Mexico, where it was set to manufacture its line of Ford Focuses. Instead, the company will build those cars out of an existing Mexican factory, which will itself bring in 200 more workers.
The decision to move production from a new plant in Mexico to an existing factory there stemmed from decreased demand for small vehicles in North America. “We just didn’t need to capacity anymore,” Ford CEO and president Mark Fields told WIRED in an interview. But he maintains that manufacturing these vehicles in Mexico, where they can be made for less money, is still crucial to being able to sell them for a price consumers are willing to pay.
Nevertheless, president-elect Trump is already taking credit for Ford's decisions:
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Trump routinely condemned Ford on the campaign trail for its plans to open the Mexican facility, threatening to impose a 35 percent tax on vehicles and parts made in Mexico. Such taxes would require Congressional approval and would violate the North American Free Trade Agreement. That hasn't stopped Trump from leveling a similar threat via Twitter at Ford rival General Motors:
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His approach may be unprecedented for a president, but Trump's tactic of publicly denouncing businesses—especially via his favorite form of social media—is paying off, at least while companies are trying to curry favor with an incoming administration. It's less clear whether trolling companies on Twitter amounts to a viable long-term strategy, even as it scores Trump public relations wins in the short term. After all, Ford still generates around 15 percent of its sales from vehicles manufactured in Mexico. The company will likely point to its Michigan expansion as it seeks negotiations that extend beyond 140 characters. Trump, meanwhile, seems to be finding that the bully pulpit works best when you become an online bully.
Fields says Trump’s overall attitude toward offshoring did play a role in the company’s decision to invest in the Flat Rock facility.
“Clearly, if there’s tariffs imposed that would impact our decision-making,” Fields said. He noted that Trump’s proposed plan to cut the corporate tax rate and eliminate regulatory barriers were also compelling. “Under president-elect Trump, we expect there to be a more positive business environment for manufacturing in the US,” Fields said.
Ford had another run-in with Trump over its Mexican operations just a few months back. In November, shortly after winning the election, the president-elect claimed credit for saving a Ford plant in Kentucky that was never actually going to shut down. Instead, Ford had planned to move production of its Lincoln MKC vehicles to Mexico while keeping the Kentucky facility open to manufacture Ford Escapes.
Following a meeting between Ford chairman William Clay Ford Jr. and Trump, the company decided to continue manufacturing the Lincoln vehicles in Kentucky.
Fields says that the president-elect wasn't directly involved in this more recent decision to cancel the construction of the Mexican plant. "This was really about looking at the market demand for small vehicles," he says.
Still, Trump's tweets aimed at individual companies have pushed changes before. Late last year, air conditioning manufacturer Carrier said it was canceling plans to move 1,000 jobs from Indiana to Mexico after Trump pressured the company on Twitter:
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The state of Indiana, where vice president-elect Mike Pence is governor, offered Carrier substantial tax incentives to remain. Critics lambasted the entire negotiation as a paint-by-numbers guide for other businesses on how to bully the Trump administration into offering sweetheart tax breaks.
Ford didn't appear to receive similar largesse. Even if it had, autoworkers in Michigan aren't likely to complain about the company's decision to devote more domestic jobs to a seeming growth market. Electrified vehicles are expected to outsell gasoline ones by the year 2032, as Fields noted in a press conference today.
Ford's announcement wasn't just about jobs, of course. It was also about the vehicles themselves. Ford today also offered a few (sparse) details on seven of its thirteen upcoming electric vehicles.
The company already has an electric car on the market—the Focus Electric, introduced in 2011. But as automakers like Tesla, Toyota, GM, and Nissan have led the way in affordable hybrid and all-electric, Ford has lagged behind. Today Fields said the company will spend $4.5 billion on electric vehicles over the next three years.
As part of that investment, Ford will officially join the all-electric SUV fray with a new small model by 2020 that boasts a range of at least 300 miles. They'll join Jaguar, Volkswagen, Tesla, and GM, all of whom have electric SUVs on the sales floor or in the works. Ford’s banner F-150 and Mustang models, meanwhile, are getting the hybrid treatment, both out in 2020. The Mustang is set to be even more powerful—with V8 power and even more low-end torque, the company promises—and the F-150 pickup will work as a mobile generator. That feature, Fields said, could be a big selling point for a truck often used on construction sites and farms. "If you’ve ever been on a worksite, the thing they're always looking for is an electrical outlet," he said.
Other plans include a plug-in hybrid van for the European market, two new hybrid police vehicles, and a previously announced fully autonomous vehicle, which the company now confirms will be a hybrid. (That will hit the streets by 2021, Ford promises.)
The move toward electric adds up to a pretty heady moment for both the US car market cars and auto industry jobs, with production of these vehicles taking place at both the Michigan plant and another facility in Chicago. But the short-term picture of the industry is still murky. Will a Trump administration stay the course on federal tax credits, and on President Barack Obama’s aggressive fuel standard plans? The road ahead remains long, and is likely to include many 140-character speed bumps along the way.
