Ford is canceling its plans to build a $1.6 billion plant in Mexico due to decreased demand for small car production, rather than pressure from President-elect Donald Trump's administration, CEO Mark Fields said on CNBC's "Halftime Report" on Tuesday afternoon. Trump has been putting pressure on companies to keep business in the U.S. and called out General Motors (GM) for its business in Mexico in a tweet this morning.
"The main reason for not building the plant and canceling the plant in Mexico is just due to market demand," he said. "The bottom line guys is that we're not seeing the volume and demand that we expected at that plant."
Ford decided to use capacity it already had in an existing facility in Mexico, since demand had dropped, Fields explained.
Earlier today, Fields met with Trump and Vice President-elect Mike Pence and they are both "very happy" with this decision, Fields noted. They were also pleased to hear that Ford will be investing $700 million in its plant in Flat Rock, Michigan and that it will be adding 700 jobs there.
"Our home is here in the U.S. and it's really important for us to be strong and vibrant here in our home and build on the investments and job creation we've been able to produce over the last five years," he explained.
The company makes business decisions based first and foremost on what's best for Ford and its shareholders, but it also wants to be sure it has "good relations with various governments in power," he noted.
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