Ford Motor Co., which is planning to cut jobs and close factories in the U.S., said Friday that it would upgrade and expand three Mexican plants over the next several years.
Auto assembly plants in Cuautitlan and Hermosillo and an engine plant in Chihuahua will get the investment, Ford said on its website, without giving any estimates of cost or specific timing. The automaker said it had not decided where to locate a new, low-cost North American auto plant.
Investing in Mexico may rankle union members in the U.S. Ford, based in Dearborn, Mich., plans to cut 30,000 jobs in its home market and close 14 North American factories by 2012 as it loses U.S. market share. The United Auto Workers union represents only U.S. workers.
"It's absolutely critical that they do more in Mexico, a heck of a lot more," said David Healy, a Sierra Vista, Ariz.-based analyst for Burnham Securities Inc. "They pay way too much for labor in the U.S."
The Oakland Press of Pontiac, Mich., reported this week that Ford planned to invest $9.2 billion in its operations in Mexico between now and 2012 to build a new plant and boost production of engines and transmissions. The newspaper said it had obtained a 28-page company document detailing the plans.
Ford, the second-largest U.S. automaker, released the information on its Mexican plans Friday in response to media speculation about the investment, spokesman Said Deep said.
"Of our total North American investment, 90% is still in the U.S., with less than 5% in Mexico," Deep said. "And for engineering resources, that's 98% in the U.S."
Mexican manufacturing workers earn the equivalent of about $17.38 a day on average, according to the website for the Mexican ministry of labor. A Ford UAW auto assembly worker earns about $27.31 an hour, according to the UAW website.
"This message about Mexico is a huge blow to the UAW," Healy said. "It's a very brave move, but it could save the company."
Ford's shares fell 9 cents to $6.69.