Ford spending $550M to switch Michigan Assembly from trucks to small cars/EV
Ford has found a way to turn a lemon into lemonade. Its Michigan Truck Plant that formerly built the Ford Expedition and Lincoln Navigator will be building something else entirely in the future: small cars and electric vehicles. Ford announced today it's investing $550 million in the plant to create a modern, efficient and flexible facility where the next-generation, North American version of the global Focus will be built, along with an all-electric version of the car. The next Focus will begin production here as soon as next year, while the EV version debuts in 2011. Ford's getting some help from state and local governments in the form of tax credits to switch the plant's purpose, but many are based on job retention targets that should mean all 3,200 people who work there now will continue to do so.
The plant, which will now be called just Michigan Assembly Plant, shall soon be joined by two more plants that are switching from producing trucks and SUVs to small cars. Cuautitlan Assembly in Mexico has been chosen to build the new North American version of the Fiesta subcompact and Louisville Assembly, once the producer of Super Duty trucks, will be given another vehicle to build based on the global Focus platform.
[Source: Ford]
PRESS RELEASE
FORD INVESTS $550 MILLION TO BUILD NEW GLOBAL SMALL CARS, ELECTRIC VEHICLE AT MICHIGAN PLANT
* Ford invests $550 million to transform Michigan Assembly Plant (formerly Michigan Truck Plant) from a large SUV factory into a modern, flexible small car plant
* Production for the North American market of the new global Ford Focus begins next year followed by production in 2011 of a battery-electric Focus, helping Ford meet its promise of delivering four new electric vehicles in the U.S. by 2012
* The investment will support approximately 3,200 jobs at Michigan Assembly
* Ford and United Auto Workers are developing a framework of new and leading-edge operating practices at the plant that will ensure high quality and maximum efficiency
* The state of Michigan and local governments provided tax incentives and grants that enabled the investment in Michigan Assembly, which will be designated as the state's first automotive technology anchor site.
Supporting Materials
WAYNE, Mich., May 6, 2009 – Ford Motor Company said today it is investing $550 million to transform its Michigan Assembly Plant into a lean, green and flexible manufacturing complex that will build Ford's next-generation Focus global small car along with a new battery-electric version of the Focus for the North American market.
The plant, formerly the production site for Ford Expedition and Lincoln Navigators SUVs, is one of three North American light truck plants Ford is retooling to build fuel-efficient global small cars in the coming years. The new Focus will begin rolling off the line next year and the battery-electric version of the Focus – Ford's first all-electric passenger car – debuts in 2011.
As part of the retooling, Ford will consolidate its operations from Wayne Assembly Plant. When production launches in 2010, approximately 3,200 employees will be building the new Focus at Michigan Assembly Plant. At the plant, Ford and United Auto Workers are developing modern new operating practices to ensure high quality and even greater efficiency.
"The transformation of Michigan Assembly Plant embodies the larger transformation under way at Ford," said Ford President and CEO Alan Mulally. "This is about investing in modern, efficient and flexible American manufacturing. It is about fuel economy and the electrification of vehicles. It is about leveraging our expertise and vehicle platforms around the world and partnering with the UAW to deliver best-in-class global small cars. It is about skilled and motivated teams working together in new ways to create the future of automobile manufacturing in the United States."
The reinvention of Michigan Assembly, once one of the world's most profitable auto plants during the SUV boom of the late 1990s, is rooted in the fundamental strategic shift by Ford to leverage its global assets to bring six world-class small cars to the American market by the end of 2012. To produce the vehicles, Ford is converting three truck and SUV plants to car plants – Michigan Assembly, Cuautitlan Assembly in Mexico, which begins building the new Fiesta subcompact early next year; and Louisville (Ky.) Assembly, which will be converted to produce small vehicles from Ford's global Focus platform beginning in 2011.
The new Focus is being developed in Europe – where Ford is a leader in small cars – off a new global C-car platform. Over time, the new platform will be the basis for more than 2 million units annually around the world, including Focus and other derivatives, allowing Ford to leverage economies of scale to improve investment efficiency.
The zero-emission Focus battery-electric vehicle, which is being developed in partnership with Magna International, features a high-voltage electric motor powered by a high capacity Lithium Ion battery pack and charged by plugging in to a 110-volt or 220-volt outlet. The vehicle is one part of a larger strategy Ford announced in January to develop electric vehicles for North America quickly and affordably by leveraging its global platform capability.
In addition to the Focus battery electric vehicle, Ford is collaborating with Smith Electric to sell a Transit Connect battery electric commercial vehicle for North America in 2010. Ford's product plans also include a next-generation hybrid vehicle in 2012 and a plug-in hybrid vehicle in 2012.
"We're changing from a company focused mainly on trucks and SUVs to a company with a balanced product lineup that includes even more high-quality, fuel-efficient small cars, hybrids and all-electric vehicles," said Mark Fields, Ford's president of The Americas. "As customers move to more fuel-efficient vehicles, we'll be there with more of the products they really want."
Investing in American manufacturing
The $550 million investment in Michigan Assembly includes more than $430 million in manufacturing investment at the site, as well as $120 million for launch and engineering costs. In addition, Ford will be making significant investment in supplier tooling to support the plant.
The state of Michigan, Wayne County and the city of Wayne contributed more than $160 million in tax credits and grants to support Ford's expansion opportunities. Key elements include:
* Tax incentives based on job retention at the site;
* A Brownfield tax incentive for economic rehabilitation of the site;
* Tax incentives to support integration of advanced batteries into new product development programs and
* Local property tax incentives for new investments at the site
Michigan Assembly Plant will be designated as the state's first automotive technology anchor site. This designation will support Ford's efforts by providing additional tax incentives to locate advanced technology suppliers in Michigan, related to future automotive technology applications.
"Ford is investing in both the future of the American auto industry and the state of Michigan by bringing together world-class products, advanced technology applications and strong partnerships with the UAW to build the next generation of vehicles that will help end our nation's dependence on foreign oil," Granholm said. "In these challenging economic times, we applaud and appreciate Ford's commitment to Michigan and to our talented workforce."
Michigan Assembly Transformation
At the heart of the plant's manufacturing transformation is a flexible body shop operation, which uses reprogrammable tooling in the body shop, standardized equipment in the paint shop and a common-build sequence in final assembly, enabling production of multiple models in the same plant.
Aiding in the implementation of flexible manufacturing is Ford's industry-leading virtual manufacturing technology. In the virtual world, engineers and plant operators evaluate tooling and product interfaces before costly installations are made on the plant floor. This method of collaboration improves launch quality and enables speed of execution.
In a flexible body shop, at least 80 percent of the robotic equipment can be programmed to weld various sized vehicles. This "non-product specific" equipment gives the body shop its flexibility and provides more efficient use of the facility.
The plant also will employ an efficient, synchronous material flow, where the material will move in kits to each operator, providing employees with the tools they need in the sequence they will need them. The plant features an integrated stamping facility, which allows the stamping and welding of all large sheet-metal parts on-site, ensuring maximum quality and minimum overhead.
Modern Work Rules
Along with the physical transformation at Michigan Assembly Plant, the UAW and Ford are working on a framework of new and class-leading operating practices that will enable the plant to operate at a high level of productivity while producing best-in-class quality products in a safe work environment.
As part of this framework, Ford and the UAW are committed to establishing a strong, progressive culture at Michigan Assembly Plant that is based on teamwork, joint problem solving and continuous improvement.
"The UAW is a key partner in enabling us to build these world-class vehicles competitively in the United States," said Joe Hinrichs, group vice president, Global Manufacturing and Labor Affairs. "This agreement will allow the work force to build on their quality commitment while improving productivity at the plant."
Reader Comments (Page 1 of 3)
RG 10:36AM (5/06/2009)
Man, another great strategic move by Ford.
Reply
Yikes 12:13PM (5/06/2009)
Isn't this being funded with tax payer money.
Jake 1:11PM (5/06/2009)
I don't know if I agree with this.
Part of this hinges on them getting some pretty large concessions from the UAW so that they can actually sell this car at a profit. They have historically lost money on US built small cars and made up the difference with large profits off of trucks and SUVs.
Ford can't sell cars like the Focus with high markups like they can with the cars and trucks that Americans actually want. Unlike the Europeans, Americans just aren't willing to pay $30k+ for a small car or hatch in large numbers.
I kind of wonder if they shouldn't target this for Mexico so they can manufacture it at lower cost and sell it for a profit.
skicat 1:49PM (5/06/2009)
Ah, more uninformed commentary from the peanut gallery.
@Yikes - NO.
@Jake - You do realize that every Ford Focus currently sold in U.S. and Canada is built Wayne Assembly, just down the road from the now-idle MI Truck? And that has been the case for the last 5 years?
And ol' Allen "Dumb Dumb" Mulally hasn't thought of any of those pesky issues that you pointed out.
http://money.cnn.com/2009/05/06/autos/ford_focus_plant/?postversion=2009050611
Jake 3:34PM (5/06/2009)
Well, skicat, according to the Wall Street Journal he has thought of these pesky issues and has considered everything that I have pointed out and stated that the Focus hasn't been profitable.
But, maybe I should just forget about the WSJ and just go with your uniformed comments.
Tang 10:38AM (5/06/2009)
"... will be given another vehicle to build based on the global Focus platform."
Ford Kuga!
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nardvark 12:08PM (5/06/2009)
or maybe C-max?
Judy Zik 12:11PM (5/06/2009)
I am going to hope for one better than that. Hopefully they build a Flex line and can build both Kuga and C-Max there. That would be awesome. Alan Mulally is turning out to be the best thing that happened to Ford in a generation. For all the trash talk about planes and CEO pay this guy appears to be worth every penny.
Len_A 3:41PM (5/06/2009)
The other vehicle built on world Focus platform will be a Mercury Capri, with a convertible version. Neighbor of mine is in Ford product development. I get to see all kinds of interesting stuff parked in his driveway. :)
Rabbi Mike 4:25PM (5/06/2009)
Len_A: And you never take PICTURES??
Len_A 5:21PM (5/06/2009)
@Rabbi Mike - Believe me, I've been VERY tempted, BUT...I don't want to get my neighbor in trouble. I could definitely use the bucks from selling such spy photos, but his house and address would be in plain view, and I know a few knuckleheads that got disciplined for getting caught like that.
Ligor 10:42AM (5/06/2009)
I used to live in Wayne MI and used to pass adn still pass by the Ford Wayne assembly plant.
it's a sad site to see if all empty and i've known this story for a long while now. I'm glad to hear that all 3200 employes will be back. that'll keep the other business around it keep hope alive and maybe push on luck to stay open till those workers come back to work.
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BigTeebo 8:23PM (5/06/2009)
I live near the St. Paul Ford plant, and saw a few cloaked trucks drive by in my neighborhood, but never was quick enough with the camera.
rodan32 10:46AM (5/06/2009)
Is the demand really shifting so far away from trucks (permanently) that swapping THREE plants is wise? I don't know if this is a solid idea or not.
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Sam 10:52AM (5/06/2009)
Think about it. Do you really need that gas guzzling truck?
mdmadph 10:54AM (5/06/2009)
Only the 27% of people the NTSA found that actually use their pickups for work -- other than them, no. (Wish I could find that article.)
Joe 11:01AM (5/06/2009)
Does it matter if anyone really needs their truck for work?
This used to be the United States of America, where people were free to decide which vehicles they wanted to purchase, regardless of need or requirements.
Unfortunately, in the United States of Obama, there's this new push to shame people for buying vehicles they don't need.
I don't NEED a 320 HP Mustang GT. In fact, with the amount of Home Depot runs and dog hauling I do, a F-150 would probably be a better choice. I LIKE driving my Mustang GT, though, so that's what I bought.
Shawn 11:05AM (5/06/2009)
Do you "need" a sports car? Do you "need" a boat? Do you really need to have a family sedan with 300 hp? Is air conditioning really needed since humans have existed for many thousands of years without it?
It isn't about what is needed but what people want. People want trucks like they want sports cars...How many people use a sports car to the full potential? No one. There will always be demand for trucks, SUVs and sports cars.
Ford is just doing what they are supposed to be doing: Fixing the weakest area of their business model.
Jay 11:31AM (5/06/2009)
I think the idea behind the changes to the plant is to make them more flexible. Right now, the plant can only be used for larger vehicles like trucks and SUVs, but after the upgrade, it will be able to be used for vehicles of many sizes (but to start, focused on small). If demand changes toward a different segment, the plant can easily produce a different segment of vehicle with little to no changes.
Zanardi1782 12:07PM (5/06/2009)
This is mostly to Joe:
I don't understand the quip about "The United States of Obama" taking away your freedom. How is Ford tooling up plants to build a small car affecting your choice to buy whatever your want?
You are still free to buy your Mustang GT, or your F150. However, the market as a whole (individuals like you and I are not the whole market) has requested smaller cars, so Ford is working up to meet that demand.
If anything, it gives all of us more choice, not less. Not everyone thinks as you and I do: just because we like driving a Mustang GT doesn't mean our neighbors do.