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Ford open to deals with Trump to keep jobs in US: CEO

Saturday, December 3, 2016 - 09:05

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Ford Motor Co is willing to work with Donald Trump to keep jobs in the US if he puts the right policies in place, the automaker's chief executive officer said.

[SOUTHFIELD, Michigan] Ford Motor Co is willing to work with Donald Trump to keep jobs in the US if he puts the right policies in place, the automaker's chief executive officer said.

"We will be very clear in the things we'd like to see," Mark Fields said in an exclusive interview at Bloomberg offices in Southfield, Michigan. "We'll continue to advocate for currency-manipulation rules to promote free and fair trade. One of our priorities is making sure fuel-economy standards reflect market realities, tax reform in general we would be very supportive of, and the safe deployment of autonomous vehicles."

After his election, Mr Trump phoned executive chairman Bill Ford to discuss the carmaker's plan to move production of the Lincoln MKC sport utility vehicle to Mexico from a plant in Louisville, Kentucky, Mr Fields said. The discussion helped convince Ford to keep building the Lincoln in the US.

Mr Trump did influence the decision "because of what he's talking about in terms of his economic policies, whether it's tax reform or otherwise," Mr Fields said.  On the campaign trail, the company was a favourite target of Mr Trump, who lambasted it for producing cars south of the border.

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Ford still plans to move its Focus compact and C-Max hybrid to Mexico from a Michigan factory, but the automaker has said it believes it can work with the new president to encourage economic growth in the US.

Mr Trump the candidate threatened to slap a 35 per cent tariff on cars Ford builds in Mexico and ships back to the US. He made a similar threat against Carrier after the unit of United Technologies Corp said it was moving production to Mexico and cutting 1,400 jobs in Indiana. Instead, Mr Trump and Carrier unveiled a deal Thursday in which the maker of furnaces and air-conditioners will get US$7 million in state incentives to keep the work in Indiana. About 1,100 Carrier employees in the Indianapolis area will still lose their jobs despite the agreement.

Mr Fields said Ford would consider working with Mr Trump to keep production in the US, but said the automaker's situation is different than Carrier's. The small cars Ford is moving out of the Michigan factory are being replaced by two other models "and not one job is being displaced," Mr Fields said.

"Our position is very different than the Carrier position," Mr Fields said. As for any Trump administration policies to keep jobs in the US, "we'll always take those into account, understanding that some of the things being proposed would impact the entire industry, as opposed to giving special deals to individual companies."

Mr Fields said he didn't know whether Mr Trump would carry through with his pledge to impose the 35 per cent tariff on Ford's Mexican-built cars, but he said he doubted that any such duty would be applied to only one company.

"If a tariff was imposed, it would be imposed on the entire industry, not just singling out a single company," Mr Fields said. "When you look at the production and supply chains and how they're integrated between the three countries" - Mexico, Canada and the US - "putting a tariff on that would have a negative impact on all the economies."

Ford received no incentives for keeping Lincoln MKC production in Kentucky, but the automaker never planned to close that Louisville plant, which also builds the Escape SUV that outsells the Lincoln version by 12-to-1. Ford already makes the Lincoln MKZ sedan and the Fusion family car in Mexico. It's building a US$1.6 billion new small-car factory in the Mexican state of San Luis Potosi, which will create 2,800 jobs there by 2020.

Ford has said it is just the fifth-largest producer of vehicles in Mexico while it's the top automotive manufacturer in the US. Ford said it has added nearly 28,000 jobs in the US over the last five years. Ford employs 85,000 workers in the US and 8,800 in Mexico.

Since 2010, nine global automakers, including General Motors Co, Ford and Fiat Chrysler Automobiles NV, have announced investments of more than US$24 billion in Mexico, where wages are 80 per cent lower than in the US. Annual auto output in Mexico may more than double this decade, from 2 million to 5 million vehicles, according to the Center for Automotive Research in Ann Arbor, Michigan.

Mr Fields has undertaken an expensive effort to transform Ford into a mobility company that can take on upstarts such as Uber Technologies Inc and Google. The cost of that conversion is causing profits to fall this year and next. The carmaker has promised to put 100,000 robot taxis - without steering wheel, gas or brake pedals - on the road in five years. It's also investing US$4.5 billion to convert 40 per cent of its lineup to electrified vehicles by 2020 and is offering bike sharing and a commuter van service in San Francisco.

The second-largest US automaker has cut profit forecasts twice in the last three months. In September, Ford reduced its 2016 profit prediction by US$600 million, to US$10.2 billion from at least US$10.8 billion, due to rising recall costs. Last month, it trimmed the 2017 profit outlook for its credit unit by US$300 million, to US$1.5 billion, because declining auction values for used cars would hurt results. Ford shares have gained 6.6 per cent since the Nov 8 election.

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