Production of the new Fusion, built in Hermosillo, Mexico, for the past six years is moving in a few months to Flat Rock, Mich., to a plant jointly owned by Ford and Mazda. Because Ford plans to build so many vehicles at the plant, it took over 100% of the production lines and hired an additional 1,200 workers at the facility, which is about 25 miles south of Detroit. Ford also builds the Mustang at the plant, and plans to move the next generation design of the Taurus and Lincoln MKS sedans there as well.
"I can't underestimate how important the Fusion is to Ford," said Mark Fields, chief operating officer of Ford. "It's an all-out battle for the American garage, and Ford is in it to fight to win." Flat Rock is part of an overall plan for Ford to add 12,000 jobs in the U.S. between now and 2016.
The Fusion has received a lot of accolades thus far besides its award from AOL Autos. It was a runner-up got the Cadillac ATS for North American Car of the Year. The National Highway Traffic Safety Administration (NHTSA) also awarded the car a five-star rating in its New Car Assessment Program testing.
Even Consumer Reports, which lately has been hard on Ford, said the car "hits a lot of high notes," but did gripe about the MyFord Touch infotainment system, which has been a consistent complaint from the testing organization across the Ford lineup. AOL Autos testers, however, have found that the system has improved significantly since it was first launched and feel buyers will get used to the system fairly quickly after purchase.
The styling of the car and the overall fit and finish of the car's workmanship is what makes the Fusion a legitimate challenger to three imports ahead of Fusion--Toyota Camry, Honda Accord and Nissan Altima. Ironically, all three of those foreign-branded cars have been made in the U.S. while the Fusion had been made in Mexico.
Ford is hiring workers for a second shift at the Flat Rock plant this spring. Some of them will be new, but others will be workers who were laid off at other Ford plants. The company has also invested $555 million in new equipment at the 25-year-old plant to make the Fusion.
Why move back to the U.S.?
The labor contracts Ford cut with the United Auto Workers in 2007 and 2011 lowered the company's overall labor costs, and part of the deal with the union was to move the Fusion back to the U.S. Previously, the plant sat on a bubble at Ford, possibly facing closure.
"We re-assess where we build our vehicles every time we redesign one," said Fields. "What has happened for us is that we have made our U.S. plants like Flat Rock and Wayne Assembly (where the C-max is built) as flexible as our rivals (Toyota and Honda), and the total picture now for labor costs, productivity and especially worker quality has made the U.S. locations very desirable."
The Fusion's return to the U.S. is a big victory for the UAW. The car has potential to pass Altima and Accord in sales. Passing Toyota Camry, the top seller, is a steeper climb because Toyota can build more Camrys than Ford can build Fusions. Ford's Taurus in the early 1990s was the best selling car in America. And the Atlanta, Georgia plant that built it was regularly recognized as one of the top plants in North America for quality. Still, when Ford botched the redesign of the Taurus in the mid 1990s, it set off the car's decline and the company ultimately closed that plant in 2006.
The auto industry is not the only one in-sourcing jobs back to the U.S. General Electric has been re-tooling a facility in Louisville, Ky., to make high-tech refrigerators and low energy hot-water heaters that were previously built in China. Element Electronics last year opened up a plant in Canton, Mich., to build large flat-panel TVs. Apple is moving one of its Mac computer production lines to the U.S. next year.
When China joined the World Trade Organization in 2001, the average Chinese worker made 58 cents per hour - a cost that had companies around the world flocking to the country that has become known for cheap labor. Every year since, according to the WTO, wages in China have risen an average of 15 to 20 percent annually. Add energy costs on top of that, plus logistics costs and quality issues, and building products sold in the U.S. in the U.S. becomes much more attractive, especially as unions have negotiated contracts that close the cost gap.
Mexico, which benefits from the North American Free Trade Agreement, is still an attractive market for low-cost manufacturing because of lower wages and health-care costs than the U.S., but U.S. unions have struck deals that have made it advantageous for many companies to repatriate jobs to the U.S.
Ford is one of the leaders on in-sourcing. Ford's Fields, who figures to be the company's next CEO, says the automaker plans to invest $16 billion in its U.S. facilities while adding the 12,000 new American jobs by 2015. Helping to make that business case is that industry auto sales are expected to stay steady at between 14.5 and 15.5 million a year for the next few years as the economy continues to come back.
To take full advantage, Ford execs and designers have to do their part and not repeat their mistakes of the mid 1990s when they wrecked the one-time best-selling car in America even while their workers hit the mark for quality and productivity.