Ford Motor Company announced on April 5 that it will invest $1.6 billion in order to build a new manufacturing plant in Mexico, which will produce more small cars starting in 2018.
The company's plan, however, is met with heavy criticism from members of its U.S. union as well as from Republican front-runner Donald Trump, who called the impending factory construction "an absolute disgrace."
According to Ford, construction on the new car manufacturing plant in the Mexican state of San Luis Potosi will help produce 2,800 jobs by 2020.
The move is believed to be part of Ford's plan to transfer the manufacture of lower-priced yet slow-selling cars from one of its plants in Michigan to another site. The American automaker, however, did not specify which of its cars will be built in the San Luis Potosi plant.
Dennis Williams, president of the United Auto Workers (UAW), said that Ford's planned move to Mexico is "very troubling," arguing that it could create jobs that should have been made available to workers in the United States.
He said that the move shows the inadequacies of the North American Free Trade Agreement (NAFTA) and the proposed trade pact Trans-Pacific Partnership (TPP).
"Companies continue to run to low-wage countries and import back into the United States," Williams pointed out. "This is a broken system that needs to be fixed."
Ford's announcement also coincided with the Wisconsin primary that was attended by three of the Republican Party's leading presidential candidates: Governor John Kasich of Ohio, U.S. Senator Ted Cruz of Texas and real estate magnate Donald Trump.
Trump, who has been a vocal critic of Ford and other American companies that choose to make investments in Mexico, said that he will put a stop to such moves if he is elected president of the United States.
"These ridiculous, job-crushing transactions will not happen when I am president," Trump said.
Despite these criticisms, Ford said that it remains committed to its plan of improving the profitability of its small-car lineup through the investment in Mexico.
The carmaker asserted that the country not only has more competitive supplier and labor costs, but it also provides the company with good logistics and support from its government.
Mexico is also an ideal shipping location, which allows Ford to connect with a number of countries that have trade agreements with the Mexican government.
As far as accusations that the carmaker has chosen to focus on making investments in Mexico than in the United States, Ford said that it has put in more than $10 billion worth of investments in the United States from 2011 to 2015, leading to the creation of 25,000 additional jobs.