Ford, the car-making company, reportedly announced that it intends to carry on with its plans of opening a Mexican facility which will produce small cars, despite possible new taxes.
The Michigan-based, United States Ford Motor Company will reportedly still follows its plans of opening a Mexico-based facility.
The Mexican facility would come to replace some of the products of their Michigan-based plant which manufactures the small car or sedan models of the company.
Ford Focus would be the vehicle whose production would be moved to a Mexican facility. According to Ford representatives, the move will not have a negative impact on the current plant.
As the Ford Focus cars would be moved, two new vehicle models could come to replace the such freed up space.
Ever since the appearance of the first Mexican movement suggestions, company representatives have stated that the Michigan employees number would not be reduced.
This fact seems to be further ensured by the future production of the two apparently very important products which will be fabricated in the Michigan plants.
As of yet, the two important products have not been mentioned or even hinted at. However, the company CEO is convinced that the move will not make an impact on the current jobs.
According to recent reports which trace back to Mark Fields, the Ford Chief Executive Officer, the car maker still intends to pursue their aforementioned plans.
The future move was put to question following a series of political and campaign declaration made by Donald Trump.
During his campaign, the then presidential candidate Trump signaled out Ford and gave them as an example of United States companies that are moving their business.
As he declared that the manufacturer is sending jobs away from their current location and away to the possible Mexican facility.
The aforementioned Trump also threatened to impose an extra tariff on the cars produced and imported from the south of the U.S. border.
The proposed numbers featured a 35 percent extra tax for the American manufacturers to have moved their company overseas.
The tax would be implied once the companies tried to import their products back into the United States. It was presented as a way of stopping the movement of manufacturing jobs.
Still, according to the statement Fields is reported to have released earlier this week, even with an additional tax, the production costs would be cheaper across the border.
Fields went to explain that a vehicle manufactured in the United States is not very profitable for the company.
As such, the company would have two alternatives so as to increase its profitability, either a factory relocation or an increase in the product’s price.
The price increase is not seen as being a viable option, as a higher price would probably lead to a drop in sales.
With the main disruptive factor being the increased manufacturing costs, the best option still appears to be the investment in a Mexican facility, even if it will impose a new tax.
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