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Ford makes room for new self-driving vehicle, moving EV production to Mexico

CNBC logo CNBC 12/7/2017 Phil LeBeau

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Just months after FordF cancelled plans to build a plant in Mexico and not move some vehicle production south of the border, the automaker says it plans to shift future production of an electric vehicle from Michigan to Mexico.

The move is part of a larger plan to free up production space at the automaker's plant in Flat Rock, Michigan so it can build its first autonomous-drive vehicle.

That vehicle, will be a gas-electric hybrid model capable of operating 20 hours a day.

"You're starting to see the foundation of Ford's bet on A-V's (autonomous-drive vehicles). We're very excited about what we are doing," said Jim Farley, president of global markets for Ford.

For now, Ford is not revealing many details about the autonomous-drive vehicle it plans to build in Michigan except that it will have commercial grade performance and durability.

"While others are focusing on A-V's for ride-hailing, our business model will be much more diverse," said Farley. "We'll move people and goods."

Earlier this year, Ford announced a partnership with Domino's PizzaDPZ to develop self-driving cars to deliver pizzas to customers. Farley says the automaker will announce more commercial partners in the months to come.

The automaker says it will be investing an additional $200 million and adding another 150 jobs as it makes the Flat Rock assembly plant a center for autonomous vehicle development and production.

While the additional jobs and investment are welcome news in Michigan, it remains to be seen if moving future production to Mexico will raise the ire of President Donald Trump.

While campaigning in 2016, Trump repeatedly bashed Ford for its plan to open a small car assembly plant in Mexico. The constant attacks and promises to force Ford, as well as other automakers, to move production back to the U.S., were part of Trump's appeal to voters in Rust Belt states like Pennsylvania and Michigan.

After Trump was elected, Ford canceled plans to build a new assembly plant in Mexico and later said it would cancel plans to move production of the Lincoln MKC crossover utility vehicle from Louisville to Mexico.

Farley declined to comment on whether Ford's decision to shift production will sit well with the president: "This is not a trade-off. We are hiring and investing in the U.S.," he said.


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