Ford to add 1,200 workers in Chicago

NEW YORK (CNNMoney.com) -- Ford Motor said Tuesday it will hire 1,200 workers in Illinois as part of a $400 million plan to ramp up production of next year's Explorer.

The automaker said it expects to fill the full-time jobs at its Chicago Assembly and Chicago Stamping plants by the end of the year.

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The 2011 Ford Explorer will be manufactured in Chicago, where 1,200 workers will be hired.

"Our Chicago Assembly Plant -- with its excellent work force, lean and flexible manufacturing processes, and proud history of making great Ford vehicles -- is the ideal choice for building the new Explorer," Jim Tetreault, Ford's vice president of North America manufacturing, said in a statement.

The expansion comes as the nation's automakers look to recover from a dramatic plunge in sales, which fell to a 27-year low last year. But the new workers will probably not make as much as they would have in previous years.

Under union contracts signed in 2007, the major U.S. automakers are able to pay newly hired workers significantly less than their veteran factory workers. The contracts also allow automakers to give reduced health and pension benefits to new hires.

In accordance with its United Auto Workers contract, Ford will first extend job offers to employees it placed on "indefinite layoff" before hiring new workers, said company spokeswoman Marcey Evans. But she could not comment on how much the workers will be paid.

Ford said its investment includes $180 million for manufacturing at the Chicago sites and about $220 million for launch and engineering costs.

Ford already manufactures the Taurus and Lincoln MKS sedans at the Chicago plant, where it employs about 1,200 workers on one shift. The new workers will be added to a second shift.

The new Explorer, which will go into production during the fourth quarter, will be 25% more fuel efficient than previous model years, Ford said.

Ford currently makes the Explorer at the company's Louisville Assembly Plant in Kentucky. That plant will be retooled to make smaller, more fuel-efficient cars.

Tuesday's announcement comes two days before Ford reports its fourth-quarter financial results. Analysts surveyed by Thomson Financial expect the Dearborn, Mich.-based company to post a profit of 26 cents per share, versus a loss of $1.37 a year earlier.

In the third quarter, the only major U.S. automaker not to file for bankruptcy earned a surprise profit of $997 million, or 29 cents a share.

Ford said in November that it expects to be "solidly profitable" in 2011.

Meanwhile, Ford said it received state tax incentives for businesses that commit to new investments and create or retain jobs in the state.

Illinois Gov. Pat Quinn, who is up for election this year, hailed the new jobs, saying the expansion "has provided much needed relief to our state's ailing automotive industry."