Ford spikes plans for a $1.6 billion Mexico plant - and says it'll undertake a massive electric-car expansion instead

On Tuesday, Ford CEO Mark Fields announced that the carmaker will cancel plans to invest $1.6 billion to build a new factory in Mexico.

Instead, the company will undertake a $4.5 billion investment to rollout 13 electric vehicles over the next five years, Fields said.

A total of $700 million will be spent to expand and upgrade Ford's Flat Rock Assembly Plant in Michigan, with 700 new jobs added.

Fields' announcement occurred against the backdrop of a war of words between president-elect Donald Trump and the US auto industry about expanding production in Mexico. Trump targeted Ford in particular during the Presidential campaign.

"Ford today announced it is cancelling plans for the new plant in San Luis Potosi, Mexico," the carmaker said in a statement.

"It also announced that, to improve company profitability and ensure the financial as well as commercial success of this vehicle, the next-generation Focus will be built at an existing plant in Hermosillo, Mexico. This will make way for two new iconic products at Michigan Assembly Plant in Wayne, Michigan, where Focus is manufactured today - safeguarding approximately 3,500 U.S. jobs."

Ford is a global automaker, Fields said, but "our home is right here in Michigan."