02 Jun 08 Ford will invest $3B in Mexico

Automaker will switch plant work from trucks to Fiesta subcompact.

Ford Motor Co. announced a series of new investments in Mexico Friday worth $3 billion — the largest automotive investment ever in the country.

The Dearborn automaker confirmed plans to build the North American version of its new Ford Fiesta subcompact at its Cuautitlan Assembly Plant.

Ford also will add a new diesel line at its Chihuahua Engine Plant and is planning to build a new joint-venture transmission factory with German supplier Getrag in Guanajuato.

“It provides a cost advantage making it in Mexico,” said Erich Merkle, a product analyst at IRN Inc. in Grand Rapids.

CEO Alan Mulally was on hand for the announcement, along with Mexican President Felipe Calderón Hinojosa.

“Ford is absolutely committed to leveraging our global assets to accelerate the shift to more fuel-efficient small cars and powertrain technologies that people really want and value,” Mulally said. “Our investments in these facilities in Mexico are part of our plan to further realign our manufacturing capacity in line with the introduction of more small cars and crossovers.”

The moves are expected to create about 4,500 new Ford jobs south of the border, as well as 30,000 direct and indirect support jobs.

The Detroit News and other media had already reported that the Fiesta would be built in Mexico, but Ford had not previously confirmed those reports. On Friday, the company also said it plans to sell the sporty European hatchback model of the new subcompact in the United States, too.

The Fiesta is the production version of the Verve concept that made its U.S. debut in Detroit in January.

“Customers responded very positively after seeing both the sedan and hatchback versions of the Verve small car concept,” said Mark Fields, president of Ford’s Americas Group.

“We know the market is headed toward more small cars and crossovers.”

The car will go into production in Mexico in 2010, and will go on sale in the United States later that year. It goes on sale in Europe this year and will debut in Asia next year.

“We’re looking at every aspect of what’s defined Ford as a small-car leader in Europe and working to build on this expertise in driving dynamics and design across a global family of Ford cars that are as exciting to drive as they are to look at,” said Derrick Kuzak, Ford’s global product development chief.

“The Fiesta is designed to set a new world standard for quality, design, fuel economy and comfort in the small car segment.”

The Cuautitlan Assembly Plant currently makes trucks for the Mexican market, ranging from the Ford F-150 to the F-550. To meet future demand, trucks for Mexico will be imported from the U.S.

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