Ford to invest $2.5 billion on 2 powertrain plants in Mexico

Article by Andrew Christian, on April 18, 2015

Ford Motor Co. will be investing approximately $2.5 billion in Mexico, according to a Reuters report citing insiders. The sources said that Ford is slated to make the announcement on Friday in celebration of the 90th anniversary of its presence in Mexico. It was revealed that $1.3 billion will be used for the expansion of Ford’s plant in northern Chihuahua state where two new diesel engines will be manufactured.

The other $1.2 billion will be spent for a transmission plant in central Guanajuato state. Ford’s anniversary will be attended by President Enrique Pena Nieto. According to a Mexican official, the Chihuahua investment is expected to result to the creation of about 4,000 jobs.

A report from Mexican business newspaper El Economista divulged that Ford will be partnering with supplier Getrag on the transmission plant. Presently, Ford manufactures two large diesel engines in Mexico.

The first is a 6.7-liter V-8 turbo seen in Ford’s Super Duty trucks while the second is a smaller 4.4-liter turbo V-8 that’s used only by Land Rover’s Range Rover luxury SUV.

This smaller engine was once tapped to be used on the F-150 but it didn’t push through because of problems with costs and emissions. Raj Nair, Ford’s product development chief, hasn’t actually said that the F-150 won’t get a diesel engine.

However, it probably will not be a V-8. The weight of the latest generation aluminum-bodied F-150 is up to 700 pounds lower than the old steel-bodied truck, suggesting that it will do well with a smaller diesel engine such as a V-6.

Ram’s popular EcoDiesel 1500 features a 3.0-liter V-6 and is the most frugal pickup at 29 mpg highway.

Diesel engines are also on the way for the trucks of Chevrolet, GMC and Nissan. The Colorado and Canyon will get a 4-cylinder while the new full-size Nissan Titan will have a Cummins V-8.

This means that only Ford and Toyota are left as the only truck makers that don’t offer a diesel engine. It will benefit Ford economically if it builds a diesel engine for the F-150 in North America since it can also be used in the Euro-styled Transit van, which uses an optional 5-cylinder diesel imported from South Africa.

This 5-cylinder diesel is an old engine at the finale of its development life. According to AutoPacific analyst Dave Sullivan, Ford will put the diesel engine in the Transit. He added that the second engine may be installed in place of the existing 6.7-liter Powerstroke V-8 diesel engine.

So far, Ford spokesman Mike Levine has been refusing to make a statement on what the company plans for the F-150. Many analysts anticipate Ford to offer a diesel engine in the F-150 together with the upcoming 10-speed automatic transmission, allowing Ford to lead in this segment in terms of fuel economy.

Official industry figures show that the No. 4 largest auto exporter in Mexico is Ford, with overseas sales of 108,417 units in the first quarter. Most of these units were delivered to the U.S.

Topics: ford, mexico, investment

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