Ford Adding Jobs in Kentucky
December 01 2015 - 1:00AM
Dow Jones News
Ford Motor Co. will spend $1.3 billion and add 2,000 jobs in
Kentucky to aid the changeover to a new heavier-duty version of its
F-Series pickup trucks, a move that will expand availability of the
auto maker's most profitable vehicle line.
The Dearborn, Mich., company is partially through a historic
transition for its popular F-Series. About a year ago, the company
started selling an aluminum version of its lighter F-150, saying
the move away from steel body panels shaved weight and improved
fuel economy.
Now, bigger versions of the truck—including F-250 and F-350
Super Duty trucks—will move to aluminum. A plant employing 4,800 in
Louisville is the lone production source of the Super Duty, along
with the Expedition and Lincoln Navigator SUVs.
The investment, representing more than 20% of Ford's typical
rate of annual capital spending, represents the first major
workforce expansion since Ford signed a new labor agreement with
the United Auto Workers last month. Expanding the Kentucky Truck
Plant's hourly workforce by roughly 40% could be a major step in
Ford maintaining its pledge to the union to keep or create 8,500
jobs over the next four years.
By adding jobs at a high-profit truck plant, the company is
following a strategy of expanding production of larger vehicles in
the U.S. while moving more of its small-car manufacturing to
lower-cost countries, such as Mexico. Rising labor costs threaten
to slow investments in domestic auto factories.
"We need to have some flexibility to move some of our smaller
products to other locations," Joe Hinrichs, Ford's president of the
Americas, said in a conference call Monday.
Through October, Ford's Kentucky truck plant built 325,000
pickups, a 1.5% increase compared with the same year-ago period,
according to WardsAuto.com. The data firm estimates the plant is
operating at nearly the highest available-production utilization
rates through the third quarter of all auto factories in North
America.
For decades, Ford has led the U.S. pickup market with its
F-Series trucks, making it a significant contributor to the
company's bottom line. The Super-Duty truck will get its first
complete overhaul in more than 15 years for the 2017 model
year.
Ford is looking for a smoother transition to aluminum than it
experienced with the F-150 starting last year. The costly move was
aimed at lightening the vehicle to better prepare it for meeting
tougher U.S. emissions standard.
The switch over, however, took much longer than usual, leaving
dealers short on trucks to sell and costing the company sales and
profits in the first half of the year. Ford has sold about 630,000
F-Series trucks through the first 10 months this year, about flat
with the same year-ago period, according to Autodata Corp.
Ford executives have pledge the Super Duty transition will go
smoother and aren't anticipating as much downtime.
"It's a very different type of launch and clearly we're
benefiting from everything we learned," Ford's Chief Financial
Officer Bob Shanks said during a recent earnings call. "This will
not be the effect that you saw with the F-150."
Write to Christina Rogers at christina.rogers@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
December 01, 2015 00:45 ET (05:45 GMT)
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