Ford, Nissan Plan Mini-Van Venture : U.S. Firm to Spend Nearly $1 Billion to Expand Ohio Plant

Ford Motor Co., which holds just less than a fourth of the fast-growing mini-van market with its Aerostar, announced plans Monday to join with Nissan Motor Corp. to make a mini-van in northeastern Ohio.

The project, which is to deliver the new vehicles to showrooms in three years, will involve a $1-billion Ford investment, about 90% of which is to be spent at Ford’s van plant in Avon Lake, Ohio, Ford Vice Chairman Harold Poling said at a news conference.

The factory, which paints and assembles bodies for Econoline and Club Wagon vans, will double to 2.2 million square feet and will employ an additional 1,300 people, bringing total employment to nearly 2,800.

Ford spokesman Jay Meisenhelder said the company first would draw employees from a pool of laid-off Ford workers before hiring from outside.

Preparation of the plant site will begin later this month or early October, Poling said.

Yoshio Arakawa, a Nissan director, told a news conference in Tokyo that Nissan’s investment in the venture would be small compared to Ford’s.

“Our basic responsibility is development, so our investment is going to be rather small,” Arakawa told reporters.

Arakawa said Nissan will take over the design and engineering of the new multipurpose vehicle and supply parts provided by its manufacturing unit, Nissan Motor Manufacturing Corp. in Smyrna, Tenn.

Earlier Ventures

Ford will assemble and provide most components of the new mini-van. About 75% of the components in the new vehicle will be made in North America, Poling said.

The venture would be the third formed by the two companies. In 1969, Ford and Nissan joined with Mazda Motor Corp. in the Japan Automatic Transmission Co. Ford sold its share to Nissan in 1984. More recently, Ford and Nissan agreed to market versions of each other’s utility vehicles in Australia.

Ford and Mazda a year ago began assembly of two cars at a plant in Flat Rock, Mich., south of Detroit. Ford owns 25% of Mazda.

The newest project, Poling said, “will give us an additional vehicle in a market niche that has grown from 5% (of the total truck market) in 1984 to 12% in 1987 and is projected at 18% to 19% for the 1993 model year.”

Poling said only styling work has been completed so far on the new mini-van, which is expected to be in production in fall 1991 for the 1992 model year. About 130,000 vehicles are expected to be produced annually, a relatively small number considering the size of the work force.

The new mini-van will be a more passenger-oriented vehicle than the mini-van that Ford sells now--the Aerostar, which has cargo and trailer-hauling capabilities.

Analyst Applauds

The Aerostar held 22% of the compact van market during the first eight months of this year. General Motors Corp. and Chrysler Corp. also produce mini-vans along with Toyota Motor Corp., Mitsubishi and Volkswagen. But the imports hold just 4% of the market.