Tue Jan 3, 2017 6:52PM
Ford cancels $1.6 billion Mexican plant
Ford cancels $1.6 billion Mexican plant

The second largest US automaker has decided to cancel a planned $1.6 billion factory in Mexico and  invest $700 million at a Michigan factory.

The decision was made after Ford Motor Co come under harsh criticism from President-elect Donald Trump for its Mexican investment plans.

"In addition to the 4.5 billion dollars that we've committed to new electrified vehicles today we today are announcing 700 million dollars to transform and expand this Flat Rock assembly plant creating a new manufacturing innovations center," Ford Chief Executive Mark Fields said.

He went further adding that 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.

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

Trump repeatedly announced during his election campaign that if elected he would not allow Ford to open the new plant in Mexico and would slap hefty tariffs taxes on imported Ford vehicles.

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

Ford in April announced it would invest $1.6 billion to build a new plant in San Luis Potosi, Mexico to build small cars.