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Mexico regrets Ford axing $1.6 bn project

AAP logoAAP 3/01/2017

The Mexican government has expressed disappointment following the announcement by Ford Motor Co to abandon plans for a $1.6 billion assembly plant in Mexico.

Mexico will see to it that Ford reimburses the San Luis Potosi state government for any expenditures of public money made to further the project, the Economy Secretariat said in a statement.

While cancelling the plant in San Luis Potosi city, the US car maker said it would spend $700 million to improve the Flat Rock Assembly Plant in Michigan.

The jobs generated by Ford in Mexico "have contributed to maintaining manufacturing jobs in the United States that otherwise would have disappeared in the face of Asian competition," the Economy Secretariat statement said, reiterating the government's commitment to making the Aztec nation more attractive to investors.

"Equally, Mexico reaffirms its stance regarding an effort to modernise the North American Free Trade Agreement (NAFTA) that strengthens the competitive capacities of North America and of each of its members," it said.

US President-elect Donald Trump said he intends to renegotiate NAFTA, which he says has been a bad deal for the United States.

Ford president and CEO Mark Fields on Tuesday denied in an interview with CNN that the decision to scrap the investment in Mexico was a concession to Trump, who has criticised American companies for moving jobs abroad.

"We didn't cut a deal with Trump. We did it for our business," Fields said.

Trump has criticised Ford's plans to expand operations in Mexico and threatened in September 2016 to impose a 35 per cent tariff on products made by the automaker at Mexican plants.

The president-elect took a shot on Tuesday at General Motors, threatening to slap it with tariffs unless it manufactured its vehicles in the United States.

"General Motors is sending Mexican made model of Chevy Cruze to US car dealers-tax free across border. Make in U.S.A. or pay big border tax!" Trump tweeted.

GM responded in a short statement, saying that the Cruze sedan was made in Ohio.

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