Ford reworks plants to lower costs and build more SUVs with the same number of workers
Ford Motor Co. is reworking its U.S. plants to lower costs and boost output of big sport utility vehicles. And unlike rival General Motors Co. — whose plan to shut four U.S. factories infuriated the president — the moves won’t cut its head count.
The automaker will eliminate shifts at factories in Michigan and Kentucky and transfer about 1,150 workers to other plants to support stronger-selling models, spokeswoman Kelli Felker said in an interview.
A factory in Louisville that produces the slower-selling Escape and Lincoln MKC SUVs is going down to two shifts, from three, in the spring. Those 500 workers will move to another Ford plant in the city to boost production of the red-hot Lincoln Navigator and Ford Expedition SUVs, Felker said. Expedition retail sales are up 36% this year, while the Navigator has soared by more than 80%.
In Flat Rock, Mich., Ford is dialing down to one shift, from two, at the factory producing the Mustang muscle car and Lincoln Continental sedan. About 500 workers there will move to a plant in Livonia, Mich., that produces transmissions for the F-150 and Ranger pickups, Felker said. Another 150 will be offered jobs at other Ford facilities, she said.
“Ford is rebalancing production at some of our U.S. plants, further increasing our efficiency while retaining jobs for all full-time hourly employees,” Felker said.
The United Auto Workers union said its contract with the automaker provides for the relocation of workers affected by shift reductions.
“The UAW will be working with our members to ensure they have continuous work and help minimize, as much as possible, any hardship on members and their families,” Rory Gamble, UAW’s vice president in charge of Ford, said in a statement.
Taking a plant down to one shift can threaten its survival. The three vehicle-assembly plants that GM said it plans to close are operating on this basis. But Ford has said it’s investing $200 million in Flat Rock and will begin building its new self-driving car there in 2021.
GM, meanwhile, may have more cutting to do.
The largest U.S. automaker spared three plants that build slow-selling cars from a production restructuring that President Trump loudly criticized this week. The factories employ more than 5,100 people, according to GM’s website.
GM’s Chevrolet Camaro plant in Lansing, Mich.; Corvette factory in Bowling Green, Ky.; and Chevy Malibu facility in Fairfax, Kan., all have been operating well below production capacity, according to data compiled by Just-auto and Bloomberg Intelligence.
While that puts these operations in a precarious position as Chief Executive Mary Barra is in ax-wielding mode, there are reasons to keep them open. Sports cars, including the Corvette and Camaro, typically see wild sales swings, with demand surging for revamped versions then tapering off once they’ve been on the market a while.
Also, Cadillac has a series of new models planned for the next few years. GM could be keeping a few underutilized plants around to add production of these vehicles.
Naughton and Welch write for Bloomberg.
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