By Nick Carey and Susan Heavey
DETROIT/WASHINGTON (Reuters) – Ford Motor Co on Tuesday said it would invest $1.2 billion in three Michigan facilities and create 130 jobs in projects largely in line with a previous agreement with the United Auto Workers union, hours after U.S. President Donald Trump touted a “major investment” by the automaker on Twitter.
In January, Ford scrapped plans to build a $1.6 billion car factory in Mexico and instead added 700 jobs in Michigan following Trumps criticism that centered on trade and investing in America.
Ford said on Tuesday it would spend $850 million on a planned upgrade of a plant in Wayne, Michigan, for the Ford Bronco, an SUV model, and the Ford Ranger – a mid-size pickup truck. The company will also invest $150 million and create 130 or retain jobs at an engine plant in Romeo.
Both projects were part of 2015 negotiations with the UAW, when Ford said it would invest $9 billion in U.S. plants over four years.
Ford also said it would invest $200 million in a data center in Flat Rock to support advances in vehicle connectivity and future developments in autonomous vehicles, but it will not result in any new hourly jobs.
The move comes at a time when U.S. new car and truck sales are at an all-time high and investors are watching closely for signs of a possible downturn in the highly-cyclical industry.
“We’re optimistic that we’ll continue to see good economic growth for the U.S. in the near term,” Joe Hinrichs, president of the Americas at Ford, told Reuters. “We feel very confident about our plan and our products and about investing in Michigan and the U.S.”
Separately, the Michigan Economic Development Corporation (MEDC) approved nearly $30 million in state incentives for Ford over 15 years at a meeting Tuesday. Ford will use the incentives to partially defray the costs of the improvements.
The MEDC noted that Ford had considered locating some of the jobs in Mexico, where it is cheaper to employ workers. “Incentive assistance was necessary to ensure the project moves forward in Michigan,” the MEDC said.
The announcement by Ford on Tuesday comes less than two weeks after Trump visited Detroit to promise more auto jobs for Michigan and other Midwestern U.S. states.
Trump pounced on Ford’s announcement before the company could release its plans on Tuesday.
“Major investment to be made in three Michigan plants,” Trump posted on Twitter early Tuesday. “Car companies coming back to U.S. JOBS! JOBS! JOBS!”
Trump has at times promoted job announcements at the White House that had been previously planned or announced. Last week he praised an investment decision by Charter Communications Inc that the company announced before he was elected.
Steve Rattner, who was an automotive policy adviser under President Barack Obama, remarked on Twitter that Trump was misleading people about jobs, saying “the big news ended up being only 130 jobs in (Michigan) that were announced back in 2015.”
Ford said last week it expected higher investments, as well as other spending, to weigh on 2017 earnings.
U.S. sales of new cars and trucks hit a record high of 17.55 million units in 2016. On Friday, industry consultants J.D. Power and LMC Automotive maintained their 2017 sales forecast of 17.6 million vehicles, an increase of 0.2 percent from 2016.
But they said automakers’ incentive spending in the United States in the first half of March had hit a record for the month, breaking the previously set mark in March 2009 during the height of the Great Recession.
On Monday, Moody’s Investors service said it expected U.S. new vehicle sales to dip in 2017 and warned of a “significant credit risk” for auto lenders as competition for loans intensifies.
Trump has focused on U.S. automotive jobs, meeting with company executives as well as pressuring – and praising – them on Twitter. Executives have also said they hope his administration will pursue tax and regulatory policies that would benefit U.S. manufacturers.
Trump has repeatedly suggested automakers will build new plants in the United States, but no company has plans to do so.
In late trading Tuesday, Ford shares were up 2.1 percent at $11.69.
(Reporting by Susan Heavey and David Shepardson in Washington, Nick Carey in Detroit; Editing by Lisa Von Ahn, Bernard Orr)