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Thursday, 23 December 2010 17:52

Ford investing $600M, hiring 1,800 at Louisville, KY, SUV plant

Ford Motor Co. is hiring 1,800 workers and spending $600 million to overhaul a factory in Louisville, Kentucky, to build small sport utility vehicles according to reports made by Bloomberg News.

The factory, which now produces the midsize Ford Explorer SUV, will begin building a redesigned version of the Escape compact utility vehicle late next year, Marcey Evans, a Ford spokeswoman, said in an interview. At that time, the plant will begin operating two shifts and employing 2,900 workers, up from one shift and 1,100 workers currently, she said.

Ford is transforming the Louisville plant into its most flexible factory, capable of producing small cars, SUVs and wagons.

Such flexibility is typical of Toyota Motor Corp. and Honda Motor Co. plants. Ford also plans to build a small Lincoln SUV in Louisville starting in 2012.

“Ford is putting itself in a position to answer the call of the consumer and build whatever they want,” said Michael Robinet, an analyst with IHS Automotive in Northville. “For several years, the method they used was to overbuild and then tape money to the hood” by offering discounts on cars.

The Louisville factory will be able to make Ford’s new Focus compact car, should consumer demand outstrip the factory in Wayne, where that model is built, Robinet said. Louisville also could build the Grand C-Max wagon Ford is bringing to the U.S. from Europe, he said.

Mark Fields, Ford’s president of the Americas, announced production of only the Escape at a ceremony earlier this month at the Louisville factory, Evans said. There are no plans to build the Focus in Louisville, she said.

Production of the Lincoln small SUV may begin around June 2012. Evans declined to comment on the Lincoln SUV production.

Once output of the 2010 Ford Explorer ends Dec. 16, Ford will gut the 55-year-old Louisville factory, Evans said. The plant will receive new tools for assembling compact-sized models, new equipment for building car bodies and upgrades to its paint shop, she said.

“It will be a pretty major overhaul,” Evans said. Some of the workers that will be added at the plant when it returns to operation in the fourth quarter of next year will be transfers from other Ford factories, Evans said.

Ford expects to hire about 1,000 employees to either work in Louisville or fill vacancies created by those moving to the Kentucky factory, she said. The new hires will be paid about $14.50 an hour, about half what veteran assembly workers make at Ford, she said. To stimulate hiring and lower costs, the United Auto Workers union agreed to create a second wage tier in the 2007 contracts with Ford, General Motors Corp. and Chrysler LLC.

“Louisville now is operating at half speed,” Robinet said. “The increased flexibility there will really help Ford better utilize its capital structure.”

The next generation Escape that will be built in Louisville is based on the Kuga model Ford sells in Europe, Robinet said. It is expected to be more fuel efficient than the current Escape, which gets 23 miles per gallon in the city and 28 mpg on the highway, according to auto researcher Ford will end production of the existing Escape at its Kansas City plant late next year as Louisville begins assembling the new model, Evans said. Kansas City will continue to build the Ford F-150 pickup on one shift. Missouri lawmakers have offered Ford incentives to bring a new model to Kansas City and keep the plant open.

“Additional new products for Kansas City will be announced at a future time,” Evans said.

Ford, the only major U.S. automaker to avoid bankruptcy last year, earned $6.37 billion in the first nine months of the year, more than any other global carmaker.

The upgrades Ford is making at Louisville will put the second-largest U.S. automaker in a better position to compete against Toyota and Honda.

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