They may be known as the “Detroit Three,” but the biggest U.S. automakers are exporting production of small cars elsewhere.
Ford confirmed yesterday that it will move small-car production to Mexico, joining Fiat Chrysler Automobiles (FCA) in eliminating small passenger cars from its U.S. factories.
Two years hence, only General Motors will still build small cars in the U.S.
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Ford CEO Mark Fields confirmed suspicions that the company would shift production of its next generation Focus compact car and various derivatives to Mexico in an interview with The Detroit News.
Both the Focus and C-Max tall wagon are currently built at a Ford plant in Wayne, Michigan, but production will be moved to Mexico within the next two to three years, Fields said.
The move to Mexico is likely motivated by cost, at a time when low gas prices are causing a slump in sales of fuel-efficient cars.
Mexican auto workers are paid significantly less than their U.S. counterparts, and typically don’t get the generous healthcare and pension plans many U.S. workers receive.
Ford announced last year that U.S. production of the Focus and C-Max would end in 2018, but did not say where those models would go.
The Dearborn carmaker plans to build a new $1.6 billion factory in San Luis Potosi, Mexico, and it has long been assumed that small-car production will be moved there.
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This plant may also build the rumored Ford Model E electric car, which may share a platform with the next-generation Focus.
Expected to start production in 2019, the Model E may be offered with hybrid and plug-in hybrid powertrains as well.
Ford will also spend $1.1 billion to expand an existing engine plant in Chihuahua, and $1.2 billion to build a new transmission plant in Guanajuato.
2017 Chevrolet Bolt EV pre-production vehicles at Orion Township Assembly Plant, March 2016
The carmaker says Mexico already ranks fourth among countries for production of cars for global markets—behind the U.S., China, and Germany.
It already builds the Fiesta subcompact and Fusion and Lincoln MKZ mid-size sedans there.
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The company has said it does not expect the transfer of Focus production to Mexico to result in U.S. job loss; the Michigan factory that currently builds the Focus may switch to a truck or SUV model.
Ford’s plan to shift Focus production to Mexico means GM will be left as the only major U.S. automaker still building small cars on its home soil.
It currently builds the Chevrolet Cruze at a factory in Lordstown, Ohio, and the Chevy Sonic at a plant in Orion, Michigan.
The Orion plant recently lost one model with the discontinuation of the Buick Verano compact sedan, but it is now the production site for the 2017 Chevrolet Bolt EV electric car.
FCA will effectively end U.S. car production when it phases out the Dodge Dart and Chrysler 200 sedans, a move meant to free up production capacity for trucks and SUVs.
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