Ford Invests $550 Million to Build New Global Small Cars, Electric Vehicle at Michigan Plant

/PRNewswire / -- Ford Motor Company (NYSE:F) 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."

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