Scuttled Ford cancels plant in Mexico

Ford Motor Co’s. cancellation of arrangements to construct a $1.6 billion car producing plant in San Luis Potosi has sounded alerts crosswise over Mexico.

Even as the nation is being shaken by rowdy protests across the nation against a Jan. 1 fuel value climb, the Ford news ruled the front pages of Mexico’s most powerful daily papers on Wednesday, and they are blaming U.S. President-elect Donald Trump.

“Trump leaves Mexico without 3,600 jobs,” read the headline on El Universal. “Ford’s braking jolts the peso,” said Reforma, referring to the Mexican currency’s nearly 1 per cent slump following the news.

“The jobs created in Mexico have contributed to maintaining manufacturing jobs in the United States which otherwise would have disappeared in the face of Asian competition,” the Mexico Economy Department said.

Two weeks before inauguration, the leaving of the cancellation of the Ford processing plant and Trump’s weight on General Motors ought to be a “much-needed wake-up call,” said Mexico analyst Alejandro Hope.

It shows “how much actual leverage Trump has within specific companies, which is far greater than what Mexican elites thought until recently,” Hope said. “They claimed that at the end of the day economic interests would prevail over political messaging. That’s clearly not the case.”

In an editorial, El Universal additionally reviewed the arrangement Trump hit in December with Carrier to keep 800 of 1,300 employments at an Indiana furnace processing plant from being sent to Mexico, as a byproduct of a large number of dollars in tax incentives. It additionally certainly condemned the Mexican government’s reaction to the approaching administration.

“Mexico loses thousands of jobs with no word on a clear strategy for confronting the next U.S. government which has presented itself as protectionist and, especially, anti-Mexican,” the paper wrote. “Trump will try to recover as many U.S. companies that have set up in Mexico as possible. He will try to make them return at whatever cost, through threats or using public resources.”

“Ford’s decision is indicative of what awaits the economies of both countries,” the daily La Jornada said. “For ours a severe decrease in investment from our neighboring country, and for the U.S. a notable increase in their production costs.”

Hope said more choices like Ford’s are likely to come. Keeping in mind the departure of a solitary arranged plant most likely does not on a very basic level, change the U.S.- Mexico economic relationship,”it certainly shows that the idea that the status quo was entrenched was false.”