Auto maker to build data-storage center, ready plant to make
pickups and SUVs
By Christina Rogers and John D. Stoll
Ford Motor Co. outlined investments in three Michigan factories
that include $200 million to build a data-storage center and an
extra $150 million to retool a small-car plant to build pickup
trucks and sport-utility vehicles.
President Donald Trump early Tuesday heralded the commitments on
Twitter, spotlighting U.S. manufacturing and jobs investments as he
faces a historically low approval rating, probes of alleged ties
between his campaign and Moscow, and a major legislative defeat on
health care last week.
While Mr. Trump portrayed Ford's moves as supporting U.S. jobs,
much of the Dearborn, Mich., auto maker's commitments had been
previously disclosed as part of a 2015 labor agreement with the
United Auto Workers union. Ford on Tuesday highlighted a total of
$1.2 billion of commitments to Michigan factories, of which $850
million had been previously outlined.
The company is seeking $30 million in tax incentives over 15
years from the state of Michigan for planned upgrades, Ford
Americas chief Joe Hinrichs said.
Ford said Tuesday it would begin retooling a factory in Wayne,
Mich., next year to build new Ranger pickup trucks and Bronco
sport-utility vehicles, adding a further $150 million to the $700
million that the company committed to the project two years ago in
the union contract. Ford also reaffirmed $150 million in spending
it had outlined in that contract to expand another local engine
plant.
The auto maker plans to begin building the pickup trucks at the
3,600-worker Wayne factory in late 2018, with production rising
through 2020 as the company adds the SUV manufacturing.
In addition, Ford again highlighted $700 million pledged in
January to convert another Michigan plant to build electric and
autonomous cars, creating 700 jobs.
"These announcements encapsulate all that is going on with our
business now and in the future," Mr. Hinrichs said in an
interview.
Ford's new $200 million investment is for the second of two
data-storage centers that aim to prepare for a future of
increasingly connected and computerized cars. The company is
investing billions of dollars to develop electric vehicles and
self-driving cars, aiming to keep pace with Silicon Valley rivals
looking to upend the traditional auto business.
Ford said the previously announced expansion of the engine plant
would create or retain 130 jobs without specifying how many of
those were new. The auto maker didn't say whether the new
investments announced Tuesday would create any jobs.
The planned investments come as Ford's U.S. sales growth has
stalled amid a broader industry slowdown after seven years of
uninterrupted growth.
Ford, coming off a string of record profits, is already
predicting a tougher road ahead. The company expects full-year
adjusted operating profit to fall 14% this year to $9 billion
because of higher costs and continued investment in new
technologies.
Ford also warned last week that first-quarter earnings per share
would be between 30 cents and 35 cents, lower than the prior-year
period and far below analysts' expectations of 47 cents. The
company is facing numerous headwinds, including higher engineering
costs, a strong dollar, rising warranty expenses and
commodity-price increases.
Ford in 2015 committed about $5 billion in investments for
Michigan factories, including facilities making components. Those
investments, part of about $9 billion the union said the company
had pledged to invest, were to roll out over the life of the
four-year contract, expiring in 2019.
"Major investment to be made in three Michigan plants," Mr.
Trump's tweet said Tuesday before Ford's announcement. "Car
companies coming back to U.S. JOBS! JOBS! JOBS!"
The announcement follows Mr. Trump's visit to Michigan earlier
in March to announce a review of federal emissions standards that
many auto makers characterize as stringent. During that visit, Mr.
Trump said to expect a big announcement coming from an auto
maker.
The move hands a positive talking point to Mr. Trump after last
week's failure by House Speaker Paul Ryan to get backing for a bill
to repeal and replace the Affordable Care Act, President Barack
Obama's signature health-care legislation.
Mr. Trump, once a critic of Ford's plans for producing small
cars in Mexico, has recently held up the auto maker as an example
of a company adding jobs in the wake of the November election. The
company recently shelved its plan to build a new plant in Mexico
and said it was rerouting investment to the Michigan plant that it
plans to convert to build electric vehicles.
Mr. Trump, whose popularity with working-class voters helped
propel him to the White House, has blasted the auto industry for
importing cars for sale in the U.S., arguing those moves are coming
at the expense of American jobs. That has put auto-industry
executives on the defensive and led them to announce new investment
in U.S. plants, even though some of the plans had already been in
the works. At the same time, auto makers have in recent months
continued to boost output from plants in Mexico, amid strong U.S.
demand for popular pickups and sport-utility vehicles made
there.
Write to Christina Rogers at christina.rogers@wsj.com and John
D. Stoll at john.stoll@wsj.com
(END) Dow Jones Newswires
March 29, 2017 02:47 ET (06:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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