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A Mexican State Is Charging Ford $65 Million For A Canceled Auto Plant

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A Mexican state is demanding that Ford covers the $65 million in expenses they laid out to prepare for a plant the automaker later reneged on the building.

The Mexican state of San Luis Potosi announced Thursday they expect Ford to pay $65 million to reimburse funds used to prepare the 690 acre plot for construction, according to the Reforma newspaper.

“The company pays $65 million, which is the maximum stipulated in the agreement, to cover expenses incurred,” San Luis Potosí Gov. Juan Manuel Carreras said in a statement.

Ford initially planned to start building the Focus at the Mexican plant in 2019 but canceled the project in January due to pressure from the Trump administration. Trump, seemingly under the impression the plant would eventually be built in the U.S, celebrated Ford’s decision.

The automaker announced in June they are moving the Focus plant to China, which offers cheaper labor costs than Mexico. Ford’s president of global operations Joe Hinrichs said the move to Chinese production is unlikely to rankle to consumers.

“Consumers care a lot more about the quality and the value than they do about the sourcing location,” Hinrichs said. “iPhones are produced in China and people don’t really talk about it,” Hinrichs told Bloomberg.

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