Ford will invest $1.2 billion to build or modernize three facilities in Michigan where it plans to assemble trucks and SUVs, and to store consumer data, a reflection of the trends that are fundamentally reshaping the auto industry’s business model and manufacturing operations in the U.S.
President Trump preempted the “big announcement” with an early morning tweet in which he touted, “Car companies coming back to U.S. JOBS! JOBS! JOBS!” Trump has pointed to a series of investments in domestic manufacturing that automakers have recently announced as a sign his administration is delivering on its economic promise to bring jobs back to the United States. Ford, Fiat-Chrysler and General Motors, among other companies, got early mentions in his joint address to Congress last month for investing and hiring in the U.S.
But such massive investment decisions take longer to plan and execute than Trump has been in office. The investments Ford announced Tuesday, for example, are part of a 2015 contract between the automaker and United Auto Workers in which the company agreed to invest $9 billion and create or retain 8,500 jobs through 2019.
Joseph Hinrichs, Ford’s president for the Americas, said in an interview that the company reached out to Trump shortly before 8 a.m. this morning about the announcement, so it is unclear what prompted the president’s 140-character missive at 6:36 a.m. The Detroit News reported the investments Monday night in a story citing anonymous sources.
Big announcement by Ford today. Major investment to be made in three Michigan plants. Car companies coming back to U.S. JOBS! JOBS! JOBS!
— Donald J. Trump (@realDonaldTrump) March 28, 2017
Ford will spend $850 million to upgrade the Michigan Assembly Plant, where it plans to manufacture the Bronco and Ranger. Ford revealed at the North American International Auto Show in January that it planned to resurrect the fan favorites, which have been retired from the U.S. market for many years. The investment will secure 3,600 jobs at the plant, a spokeswoman said.
That investment comes as more U.S. consumers are buying large vehicles; trucks and SUVs made up about 60 percent of new vehicle sales in 2016. Because big vehicles tend to fetch big sticker prices, automakers can profitably manufacture them in the U.S. while smaller vehicles are increasingly built in Mexico and other countries where labor is cheaper.
Ford will invest another $150 million and add 130 jobs at its Romeo Engine plant.
The balance of the investment, $200 million, will be used to construct a data center where Ford plans to store consumer information related to connected and autonomous cars. As cars come equipped with more applications and features, automakers are looking to derive new revenue streams from the reams of data they produce.
“If you look at the investments we’ve announced so far this year in Michigan, they capture what’s going on right now in the business,” Hinrichs said.
Ford previously announced plans to invest $700 million and add 700 jobs at a facility in Flat Rock, Mich., where it intends to produce electric and self-driving vehicles. That announcement came as Ford canceled plans to build a $1.6 billion facility in Mexico because of declining demand for the small cars built there.
While it is unclear that Trump has had any impact on the industry’s investments beyond the timing of the announcements, Ford chief executive Mark Fields and other auto executives have said they expect his administration will be favorable on issues like environmental regulations and tax reform.
Already, President Trump has announced plans to review fuel efficiency standards that the Environmental Protection Agency put in place during the Obama administration. He told auto workers in Ypsilanti, Mich. earlier this month that he would not allow regulations to threaten jobs and factories.
Read more from The Washington Post’s Innovations section.
Trump touts jobs as Ford invests $1.2 billion in Michigan plants – Washington Post