Ford Will Retool US Factories for Switch to European Models
By Brendan Moore
It was reported by several publications a few days ago that Ford was considering taking one of their shuttered or soon-to-be shuttered SUV or truck assembly plants and investing a large sum of money in retooling the plant for production of one of their European models. Such a move is unusual among automakers; renovation of a plant generally occurs when a new model or a new generation of an existing model is going to be introduced, but these are unusual times for automakers currently. The market has turned 180 degrees in the past few months due to upward-spiraling gas prices, with SUV and pickup sales plummeting like a fat guy jumping off a bridge, and consumers clamoring ever so loudly for small, fuel-efficient cars.
Ford has been rocked pretty hard by this change in consumer preferences and has not been reticent about saying that they believe the US market has irrecoverably changed towards fuel economy. Desperate times call for desperate measures, and Alan Mulally is not one given to indecision.
Our sources at Ford say that Mr. Mulally has already made the decision to convert at least three truck/SUV production facilities in North America as soon as possible to produce Ford models currently sold in Europe, where Ford is renowned for its small cars. The timeline Mulally prefers, according to insiders, is “yesterday”. He has made up his mind and is pushing forward.
Not only that, but the decision has also already been reached to make the new F-100, a smaller, lighter version of the upcoming 2009 F-150 that uses less fuel, at the Michigan Truck Plant in Wayne where they currently produce Ford Expeditions and Lincoln Navigators. Production dates have now been moved up considerably for the F-100. And, the Louisville Assembly Plant which now makes Ford Explorers and Mercury Mountaineers will be converted to a unibody facilty which will produce either the Fusion or the Focus as well as possibly some Focus derivatives.
But, back to the plants making the European models – what will they be making once they’re retooled? One sure bet is the Ford Transit van, a longtime European mainstay. Don’t be surprised to see the US production plans for the Ford Transit Connect get pushed way up as well.
Sources at Ford tell us that another plan being considered is to keep making the first-generation Ford Focus currently sold here in the States, and also make the second-generation Ford Focus currently sold in the rest of the world and sell the two alongside each other in the US for a while before moving to the second-generation Focus exclusively. The original plan was to wait until the next-generation (third-generation) Focus was released in 2011 or 2012 to accomplish the synchronization of the Ford Focus on a global basis, but it appears that plan has succumbed to defenestration at Dearborn.
Implicit in that plan is the fact that Ford intends to offer more variations of the second-generation Focus for sale in the US. Variations of the Focus platform will be produced and sold in the US; derivatives like the C-Max and a compact SUV will probably be sold here, and so will the Focus Coupe, a true pocket-rocket of a car.
The European model that may not make it over here in terms of production, and therefore sale, is the excellent Ford Mondeo. Product planners are having a tough time figuring out where it would fit, price-wise, and even though Mulally is fan of the car, its price point may be problematic.
But all of these models together, plus the sub-compact Fiesta that will be built in Mexico in 2009, give Ford a formidable line-up of fuel-efficient cars to sell in the next few years.
The retooling to be undertaken is cataclysmic and will cost a lot of money. Obviously this is money that Ford desperately needs to marshal at this point in their turnaround efforts, but Mulally and most of the senior executives now believe that if they don’t spend the money they have on the retooling right now, there will be no company to spend it on later. They are literally betting the rest of the company’s future in the next 12 months. Our sources say there is no more discussion at this point as to whether or not they should do it; the discussion now is simply just how it will be done.
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