Transformation of Michigan Assembly Plant Symbolizes Ford’s Transformation

By dancurranjr On December 17th, 2010

Ford Motor Company held its press preview for the North American International Auto Show at the newly-renovated Michigan Assembly Plant in Wayne.

The plant used to build trucks. Now, after spending $550 million, Ford says it’s the first manufacturing facility in the world to build four kinds of powertrains: gas-powered, hybrid, plug-in hybrid and all-electric vehicles.

Ford says the plant is a symbol of its own transformation to a company that builds more fuel-efficient vehicles.

CEO Alan Mulally says Ford is deeply committed to better fuel efficiency, but, at the same time, the federal government is considering new CAFE standards of 60 miles per gallon average. Mulally says any new standards have to be technically feasible. And, they can’t be out of reach for consumers.

“The most important thing is the economics of the whole thing,” Mulally says, “because people need to have the vehicles that they want but they also need to afford em.”

The Michigan Assembly Plant will build the new Focus starting next year, along with an all-electric version of the Focus, and a hybrid and plug-in hybrid vehicle yet to be announced.

Ford and its Detroit rivals Chrysler and GM have traditionally had trouble making money on small cars like the Focus in North America.

But now, the companies are beginning to see lower labor costs, as a 2007 contract with the UAW starts to kick in. Ford will be hiring a thousand new workers soon to work at its Louisville Assembly plant. The new workers will get half the usual wage of current UAW plant workers. Any new workers at the Michigan Assembly Plant will also make the lower wage.

Ford CEO Alan Mulally says another factor that allows the company to make money on small cars is using the same platform – the underpinnings of the car – to build a similar version of the Focus, everywhere in the world that Ford sells cars. Those economies of scale bring down the production cost of vehicles.

The company expects smaller cars like the Focus to become more popular in the U.S. – especially if gas prices continue to rise. Higher gas prices could also spur hybrid sales, but Ford doesn’t expect more expensive all-electric cars like the electric Focus to be big sellers for a long time.

The electric Focus will be competitively priced to compete against the Nissan Leaf, says Mulally.

Ford’s President of the Americas, Mark Fields, says the Focus will also have a similar range as the Leaf, around 100 miles. Fields says two things will limit the popularity of all-electric vehicles. The first is so-called “range anxiety,” which means having to plan every trip around the upper limits of the battery’s capabilities. That capability can vary, depending on the weather, whether the roads are hilly, and driving style.

Fields says the other limiting factor will be price. All-electric vehicles are likely to remain significantly more expensive than gas-powered or hybrid vehicles for many years.

SOURCE: Public

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