Ford Motor Company (NYSE:F) is cancelling its $1.6 billion Mexico plant on the heels of President-elect Donald Trump’s tweet concerning General Motors Company (NYSE:GM) and its Chevy Cruze. But F stock has managed to stay strong today.
Specifically, Trump threatened to hit GM with a “big border tax” if it didn’t stop sending its Mexican-made Chevy Cruze models to U.S. dealers without paying a tax. GM responded by saying very little (2.4%) of its Cruze models made in Mexico are sold in the States.
For its part, Ford has faced criticism head-on from Trump before, as the president-elect vowed to levy harsh tariffs on companies that outsource work to foreign nations. Ford stood its ground, saying that “it always has to start with the customer” and that it wouldn’t result in lost American jobs.
The company is now making an about-face.
“Make no mistake about it — Ford is a global automaker but our home is right here in the United States,” said Ford CEO Mark Fields today in a press conference. Ford now plans to invest $700 million in a Michigan factory as it seeks to expand production of electric, hybrid and autonomous vehicles.
Bottom Line on F Stock
The move, according to Ford, is to “fully utilize capacity at existing facilities.” But that’s not to say that Trump’s policies weren’t of any consequence, as Reuters‘ source claims that Trump’s policy goals did influence Ford.
The decision to invest in Michigan will add 700 jobs to the Flat Rock plant, while the company plans to add two as-of-yet unnamed products to its Wayne, Michigan plant where the Ford Focus is manufactured.
F stock is up just shy of 3.5% today, but Ford stock holders aren’t the only ones cheering the news. “We’ve seen our jobs go overseas,” said United Auto Workers Vice President Jimmy Settles. “It’s evident today that Ford is rewarding us for our hard work.”
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.
