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Carlos Osorio/Associated Press
Ford Motor said on Tuesday that it was canceling plans to build a $1.6 billion plant in Mexico and would instead invest $700 million to increase production in Michigan.
Ford had come under heavy criticism from Donald J. Trump during the election campaign for plans to expand production in Mexico. But at a news conference on Tuesday, Ford’s chief executive, Mark Fields, said the company was optimistic that Mr. Trump and the new Republican-controlled Congress would pursue growth policies that will strengthen American competitiveness in manufacturing.
Mr. Fields said that confidence, and a desire to maximize use of existing plants, had prompted the decision to expand a factory in Flat Rock, Mich., for electric and hybrid vehicles.
The announcement bought cheers from the hundreds of workers in the audience at the news conference, held at the Flat Rock plant.
“I don’t know if you can really understand the impact of this investment,” said Jimmy Settles, a vice president of the United Auto Workers union, who represents Ford workers and spoke after Mr. Fields. “This is the equivalent to a new assembly plant.”
Mr. Fields said Ford planned to use the Flat Rock plant to produce gas-electric hybrid versions of its F-150 pickup truck and the Mustang sports car, as well as a new battery-powered sport utility vehicle. The plant also makes the standard Ford Mustang and the Lincoln Continental.
The Mexican plant was to be in San Luis Potosí and would produce small cars. Ford will still move production of its Focus compact to Mexico. The company said it would make that car at an existing plant in Hermosillo. The Focus is currently made in Wayne, Mich.
“We are encouraged by the pro-growth policies that President-elect Trump and the new Congress have indicated they will pursue,” Mr. Fields said. “And we believe that these tax and regulatory reforms are critically important to boost U.S. competitiveness, and, of course, drive a resurgence in American manufacturing and high-tech innovation.”
Mr. Trump’s vows to protect manufacturing jobs, and his portrayal of the North American Free Trade Agreement as a job-killer in the United States, helped him win the support of working-class voters, including many factory workers in Michigan, Ohio and Kentucky.
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Carlos Osorio/Associated Press
Ford’s unexpected news came hours after Mr. Trump turned his sights on General Motors.
In a Twitter post Tuesday morning, Mr. Trump suggested G.M. should pay a tax for producing certain versions of a Chevrolet compact car in at a plant in Mexico.
“General Motors is sending Mexican-made model of Chevy Cruze to U.S. car dealers-tax free across border,” Mr. Trump wrote. “Make in U.S.A. or pay big border tax!”
General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!
—
Donald J. Trump (@realDonaldTrump)
Jan. 3, 2017
G.M. makes most Cruzes at a plant in Lordstown, Ohio, but last summer it disclosed plans to produce a hatchback version at a factory in Ramos Arizpe, about 100 miles south of the Texas border.
In a statement, the company said it exported most of the Cruze hatchbacks from Mexico to “global markets” and ships “a small number” to the United States.
Until now, Mr. Trump has said little about G.M., which is investing billions of dollars to expand production in Mexico. He named G.M.’s chief executive, Mary Barra, to an economic policy board that is supposed to advise him on the economy after he takes office.
The attack on G.M. is the latest by Mr. Trump on a big American corporation. In recent weeks, he has criticized Boeing over the cost of a new Air Force One and did the same to Lockheed Martin about the cost of developing a new F-35 fighter jet.
During the campaign, he railed against Carrier and its decision to close a plant in Indianapolis and open one in Mexico. Carrier recently agreed to keep about 850 jobs in Indianapolis, although it is still moving about 1,000 to Mexico.
Mr. Trump also slammed Ford for its plan to shift small-car production to Mexico, while using United States plants to produce larger vehicles like pickup trucks and S.U.V.s. Ford officials have said the change will not result in a loss of jobs at American plants.
After the election, Ford’s chairman, William Clay Ford Jr., told Mr. Trump in a phone call that the company had decided to cancel plans to move production of a small Lincoln S.U.V. to Mexico from Kentucky.
Mr. Trump then erroneously said on Twitter that Ford had decided not to move a “Lincoln plant” to Mexico from Kentucky.
