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Ford Invests $550M To Bring New Focus To Market

Wed, 05/06/2009 - 10:53am
KIMBERLY S. JOHNSON, AP Auto Writer

WAYNE, Mich. (AP) — Ford Motor Co. stripped "truck" from the name of one its Detroit-area plants Wednesday as it announced plans to build its next-generation Focus here, including a battery-electric version Ford expects will run up to 100 miles without using gas or emitting greenhouse gas.

While Chrysler LLC sells assets in a New York bankruptcy court, and General Motors Corp. works around the clock on ways to cut labor costs and debt before a government imposed deadline, Chairman Bill Ford Jr. and CEO Alan Mulally announced plans to invest $550 million to retool the Michigan Truck plant so it can make small cars it will sell worldwide.

"In the worst of times worldwide, we're here today to celebrate a plan to profitably grow Ford," Mulally said. "We're fighting for the soul of manufacturing in the United States of America and worldwide."

Mulally said that the Dearborn, Mich.-based automaker would build more than 2 million vehicles a year on its small C-car platform globally.

Ford and Mulally were flanked by a crowd of 500 employees, reporters and state officials, including Michigan Gov. Jennifer Granholm.

The retooled facility, which once built hefty sport utility vehicles like the Lincoln Navigator and is now called the Michigan Assembly Plant, will build Ford's next-generation Focus, expected to roll off the line next year. Those cars will be sold globally.

The plant will also build a new battery-electric version of the Focus for the North American market in conjunction with battery maker Magna. That vehicle is expected to debut in 2011.

"We're building the highest tech vehicle in our fleet here in Michigan," Ford said. "It going to be a critical step toward the commercialization and ultimately the acceptance of electric vehicles."

The plant that once helped Ford's profitability, is expected to do the same with the Focus, Mulally said.

The struggling automaker, which lost $1.4 billion in the first quarter, said roughly 3,200 jobs will be created in Michigan because of the plant conversion and will reopen late next year.

Mulally said that Ford's restructuring efforts are "on track" as the company has cut labor costs, debt, and is adjusting its manufacturing operations to meet consumer demand.

Ford said it will also consolidate operations at its Wayne Assembly plant and transform two other truck and SUV plants — Cuautitlan Assembly in Mexico and Louisville Assembly in Kentucky — as part of the retooling. UAW vice president Bob King said Ford's Ohio Assembly plant in Avon Lake, Ohio, is also on the list to build new cars.

The majority of Ford's investment will be spent on manufacturing at the site and the remainder on engineering and launch costs. Michigan, Wayne county and the city of Wayne have contributed more than $160 million in tax credits and grants to support Ford's expansion.

In addition to Ford's zero-emission Focus battery-electric car, the company is working on several other product plans. The company is working with Smith Electric to sell a battery electric commercial vehicle for North America in 2010, the Transit Connect. It also plans to introduce in 2012 a next-generation hybrid vehicle and a plug-in hybrid vehicle.

Ford is the only U.S. automaker not taking any government aid, but it has talked to President Obama's auto task force regarding suppliers who are ailing as GM and Chrysler halt production and face running out of cash.

"We have no issues right now paying our bills on time," Mulally said. "The supply base is the No. 1 issue."

He said that stabilizing the banking sector would be helpful to suppliers because it would offer them easier access to credit, which many need to fund basic operations. Mulally said that it's unclear whether the task force would offer additional aid to supplier, but said Ford was not in the position to carry the entire supply base.

Ford shares rose 38 cents, or 6.5 percent, to $6.23 in afternoon trading.

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