Ford’s loss on canceled Mexico plant will be lower than expected

on Apr28

A January photo of the construction site where Ford cancelled a $1.6 billion plant in Villa de Reyes, on the outskirts of San Luis Potosi, Mexico. Photo credit: Reuters

DETROIT — Ford Motor Co.’s loss on its aborted Mexico plant in San Luis Potosi totaled $153 million, 23 percent less than it had originally booked.

The automaker had expected a $199 million loss, Ford officials said Thursday. The $46 million difference came from re-using parts and equipment that Ford had already booked as part of the site’s initial construction.

A steel skeleton had begun to rise on the Mexican site before Ford made the decision in January to stop construction on the new $1.6 billion plant, which began the prior spring. Instead, it will shoehorn production of its Focus sedan — which was planned to be built at the new plant in 2018 — into an already-existing plant in Hermosillo. Executives said at the time that Ford would save $500 million by not opening the new manufacturing site.

The reversal, made less than a year after Ford announced plans to build the plant, came amid criticism from then President-elect Donald Trump for Ford’s expansion in Mexico.

CEO Mark Fields cited changing market demands and slower sales of small cars as the decision to keep the Focus in Mexico.

Ford officials until now had declined to reveal specific construction costs for the plant.

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