El Paso

Economist: Ford's decision to scrap Mexican plant could affect border economy

Peso fell to another low against the dollar

Economist explains how Ford's...

EL PASO, Texas - Ford Motor Company announced Tuesday it is scrapping plans for a $1.6 billion manufacturing plant in Mexico and instead expanding its plant in Flat Rock, Michigan.

The move is a $700 million investment expected to create 700 jobs in the Great Lakes State. The original plan called for a new manufacturing plant in San Luis Potosi, Mexico.

UTEP border economist Adam Walke said it's unclear if this will be the start of a trend, but if it were to continue, it could provide a big blow to Ciudad Juarez's economy. 

"For Juarez, [manufacturing] is the core of the local economy," Walke said. "Employment in Juarez increases and decreases in tandem with the maquiladora sector."

Walke said Juarez's economy is intertwined with El Paso's. "Anything that hurts that sector has profound implications for the city as a whole," Walke said. "So anything that hurts Northern Mexico's economy, particularly Ciudad Juarez, has implications across the border."

Ford CEO Mark Fields said he spoke with president-elect Donald Trump before making the announcement.

"This is really around making sure, as we make these decisions, that it's first right for our business," Fields said. "We look at all factors, including what we view as a more positive U.S. manufacturing business environment under president-elect Trump."

Ford's announcement has already had an impact south of the border. The peso's value has decreased to $21.1119 MXN to $1 USD -- the lowest it's been since November 14, 2016.

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