Following chiding by Trump, Ford cancels $1.6 billion Mexican plant

FLAT ROCK, Mich. - Ford Motor Co. said Tuesday it will cancel a planned $1.6 billion factory in Mexico and will invest $700 million at a Michigan factory, after it had come under harsh criticism from President-elect Donald Trump for its Mexican investment plans.

The second-largest U.S. automaker said it would build new electric, hybrid and autonomous vehicles at the Flat Rock, Mich., plant.

Ford CEO Mark Fields said the decision to cancel the new plant in Mexico was in part related to the need to 'fully utilize capacity at existing facilities” amid declining sales of small and medium sized cars such as the Focus and Fusion.

Fields also endorsed 'pro growth” tax and regulatory policies advocated by Trump and the Republican led Congress.

Trump repeatedly said during the election campaign that if elected he would not allow Ford to open the new plant in Mexico, which he called an 'absolute disgrace” and would slap hefty tariffs taxes on imported Ford vehicles.

Ford executive chairman Bill Ford Jr. told reporters that he spoke with Trump to notify him of the decision.

A Ford source said the decision was influenced by Trump's policy goals such as lowering taxes and regulations but there were no negotiations between Ford and the Republican over the decision to cancel the Mexico plant or invest in Michigan.

Also on Tuesday, Trump threatened to impose a 'big border tax” on General Motors Co. for making some of its Chevrolet Cruze cars in Mexico.