Ford said it will invest $1.6 billion to build a new small-car assembly plant in Mexico, creating 2,800 jobs by 2020.
The factory will be in the state of San Luis Potosi, Ford said in a statement. Construction will begin this summer, and production is scheduled to begin in two years.
Ford said the move will not affect jobs in the U.S., where it has hired 25,000 workers in the past five years. Still, the news reinvigorated criticism from Republican presidential candidate Donald Trump and others over Mexico’s growing role in the North American auto industry.
“We set up our global manufacturing footprint and our facilities where we think it makes the most sense for our business,” Joe Hinrichs, Ford’s president of the Americas said.
UAW President Dennis Williams called the news “very troubling.”
“For every investment in Mexico, it means jobs that could have and should have been available right here in the USA,” Williams said in a statement. “Companies continue to run to low-wage countries and import back into the United States. This is a broken system that needs to be fixed.”
Ford had previously said it plans to discontinue production of the Focus and C-Max compact cars at its Michigan Assembly Plant in 2018.
Hinrichs declined to identify which vehicles the plant will make or give an indication of the plant’s annual production capacity. UAW officials and analysts have said they expect Focus assembly to move to Mexico in 2018.
The move comes amid waning demand for small cars, which are generally among the least-profitable vehicle segments, as consumers buy more crossovers, SUVs and pickups instead. Ford is expected to build a midsize pickup and eventually at least one SUV at the Michigan Assembly Plant after Focus production ends there, though it hasn’t made any official announcement.
