No sign that tax moves by Trump or Biden affected Ford car plans in Ohio, Mexico

The United Auto Workers Union told its members at Ford Motor Co. in March that the automaker is backing out of a planned $900 million investment at an Ohio assembly plant and moving a key vehicle project to Mexico.

A Facebook post attributes Ford’s apparent about-face to a shift in corporate tax policy between Donald Trump and Joe Biden.

The post begins by stating: "Trump lowered taxes and in 2019 Ford made a commitment to invest $900 million at its Avon Lake, OH plant." 

Below that is a photo of Biden speaking and the text: "I am increasing taxes and NOW the entire Ford project is moving to Mexico. I will always put other countries first."

The post was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook.)

There are signs that Ford might be shifting plans for production of a new vehicle from Ohio to Mexico. But we didn’t find clear evidence from news reports or from Ford that the change is directly due to shifting tax policy.

Meanwhile, the post leaves out context about other factors that influence automakers’ production decisions.  

Mexico has long been an attractive production site for U.S. and foreign automakers because of its relatively low labor costs and trade agreements that make it economical to export Mexican-made vehicles around the world. But balancing production between the U.S. and Mexico is a politically delicate task.

As a candidate and as president, Trump continually pressured Ford and other automakers to boost manufacturing in the U.S. and reduce their dependence on Mexico, including threatening a border tax on imported vehicles and pushing for a rewrite of the North American Free Trade Agreement that would favor U.S. production. He pitched his 2017 corporate tax-cut proposal as a way to help reverse a decline in U.S. manufacturing.

Ford praised Trump’s proposals to reduce corporate tax rates, although companies such as Ford with heavy debt were not expected to benefit from the tax cuts he signed into law in 2017.

In November 2019, Ford and the United Auto Workers union approved a four-year contract with $6 billion in investment in Ford’s U.S. manufacturing facilities, including $900 million at the Ohio plant, which builds heavy-duty trucks and employs about 1,740 people. The plant was to get production of a new, unnamed vehicle by 2023. 

News stories on the tentative contract agreement — including those by CNBC, Automotive News, the New York Times and Fox Business — made no mention of Trump’s tax policy as a factor. 

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Fox News reported California Gov. Gavin Newsom “will withhold” California’s federal income tax.

The next month, Ford announced another domestic investment, saying it would invest $1.45 billion in its plants in southeast Michigan.

While U.S. automakers keep an eye on trade rules, federal policy and political winds to guide their production strategies, other important trends have also influenced their thinking and reordered their production plans in recent years: a shift away from traditional car models in favor of SUVs and pickup trucks, a strategic shift toward electric vehicles, and rising costs for research on autonomous vehicle and fuel-efficiency technology.

At Ford, several sedan models that Ford were built at its Mexico plants have been eliminated from its U.S. lineup. And this year, Ford doubled its spending commitment to electric vehicles.

Biden campaigned on plans to grow federal revenue by $3.6 trillion over the next decade, primarily by raising business taxes and taxes on households with incomes over $400,000 a year. In mid-March 2021, news reports said Biden was considering moves to increase taxes on the wealthy and corporations. 

More recently, after the Facebook post we’re checking was posted, Biden announced plans to finance his $2.3 million infrastructure plan in part by raising the corporate tax rate from 21% to 28%, and by imposing a 21% global minimum tax, so that companies cannot avoid taxes by shifting income to low-tax countries.

Reuters reported that Ford issued a statement that did not directly address the union’s criticism, but had said in a letter to employees that conditions had changed since 2019.

Asked about whether its decisions about the Ohio plant were tied to tax policies, a Ford spokesman told PolitiFact: "The business decision in question was not a result of then-presidential candidate Biden’s corporate tax proposals."

"We remain committed to investing $6 billion in our U.S. plants and creating and retaining 8,500 jobs in America during this four-year UAW contract. We are invested in Ohio Assembly Plant and our dedicated workforce there," the spokesman said. "Since 2019, we have invested more than $185 million and created and retained more than 100 jobs at Ohio Assembly Plant, including actions planned for this year." 

A Ford spokeswoman declined to say what vehicle the company plans to manufacture in Mexico, according to Fox Business.

A post shared on Facebook claims that Trump "lowered taxes and in 2019 Ford made a commitment to invest $900 million at its Avon Lake, OH plant," and Biden is "increasing taxes and now the entire Ford project is moving to Mexico."

There are signs that Ford might be shifting plans for manufacturing a new model of vehicle from Ohio to Mexico. 

But there are no indications that Trump’s tax cuts led to the initial plans in Ohio or that Biden’s possible tax hikes had any role in a possible shift in those plans to Mexico.

For a post that contains only an element of truth and leaves out important context, our rating is Mostly False.