The second largest U.S. automaker said it would build new electric, hybrid and autonomous vehicles at the Flat Rock, Michigan plant.
Ford Chief Executive Mark Fields said the decision to cancel the new Mexico factory was in part related to the need to "fully utilize capacity at existing facilities" amid declining sales of small and medium sized cars such as the Focus and Fusion.
Fields also endorsed "pro-growth" tax and regulatory policies advocated by Trump and the Republican-led Congress. "This is a vote of confidence for President-elect Trump and some of the policies he may be pursuing," Fields said.
Trump repeatedly said during the election campaign that if elected he would not allow Ford to open the new plant in Mexico, which he called an "absolute disgrace" and would slap hefty tariffs taxes on imported Ford vehicles.
The announcement comes after Trump threatened Tuesday to impose a "big border tax" on General Motors for making some of its Chevrolet Cruze compact cars in Mexico.
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