When Ford canceled a $1.8 billion production facility in Mexico for the next-generation Focus compact sedan, fans of American manufacturing cheered. But it's not like the Focus is going to be built in the US.
Ford announced Tuesday that the next-generation, which begins production in the second half of 2019, will initially be exported from China. Additional variants will come from Europe following that, but at no point will it be built in the US.
In fact, the US facility currently tasked with Focus production will shift over to the Ranger and Bronco, once production of the current Focus ends in mid-2018. Given the growing demand for trucks and crossovers, and the dwindling demand for small sedans, this should keep the Michigan Assembly Plant plenty busy in the future.
Joe Hinrichs, president of Ford's global operations, told Reuters that Ford's decision for this shift comes down to one thing -- money. Instead of retooling two plants (one in Mexico, and one in the US) to deal with next-gen Focus production, it now only has to retool a single plant in China. The aforementioned lack of small-car demand made this the most cost-effective decision, even with the specter of a potential import tax looming over the automaker's head.
Canceling the new facility in San Luis Potosi, Mexico saved the company about $500 million in investment costs, and this new shift to China will add another $500 million to that total, for a net savings of $1 billion.
Ford will be the third automaker to sell an imported Chinese vehicle in the US. Volvo was the first, with its S60 Inscription sedan, with the , which , hopefully putting to rest some homegrown concerns about Chinese vehicle manufacturing.