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back to index backLATINtalk June,  2004


Mexico: Why a $1.6bn car plant has been left to decay

Mexico is currently the world's fourth largest car exporter, but could US President Donald Trump's plans to renegotiate the North American Free Trade Agreement (Nafta) between the US, Canada and Mexico bring this to an end?

On the outskirts of the Mexican state of San Luis Potosi, the skeletal remains of the partially constructed Ford plant loom over the desert. To the residents of the small towns surrounding the site it's a constant reminder of a failed economic promise.

For Jose Puebla Ortiz, who sold his plot of land to Ford, it's still painful to think of the economic prosperity his family could have had.

Mr Puebla Ortiz used the proceeds from the sale to buy a truck. He expected to work as a private contractor during the plant's construction, but since the company cancelled its plans he has struggled to find regular high-paying work.

"When Ford arrived and we thought everything would be good... there was investment and there was money," he says.

Now that investment has dried up.

"[Ford] decided to pull out and overnight they told us, 'it's over, we're not continuing, we're leaving, this is cancelled.' And, well, there was nothing we could do."

In January, Ford announced it was cancelling plans to spend $1.6bn (£1.2bn) building a factory in here in central Mexico. The company's chief executive at the time, Mark Fields, said the decision related to the declining sales of small cars the company was intending to build at the new plant.

But he also admitted that Donald Trump's presidential victory and the "improved business climate" the company expected as a result was a factor.

During the campaign and since assuming the presidency Mr Trump has expressed his anger at car companies such as GM and Toyota for using Mexican plants to build cars sold in the US.

He has called for the North American Free Trade Agreement (Nafta) to be renegotiated, blaming it for the loss of US jobs.

The agreement - which came into effect between the US, Canada and Mexico in 1994 - created one of the world's largest free trade zones by reducing or eliminating tariffs on most products.

To read entire article, please click here.

Source: BBC News - GAI





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