Ford plant dumps SUVs, goes small

Automaker is investing $550 million to convert Michigan plant from building trucks to producing fuel-efficient cars. Mullaly says small vehicles can be sold profitably in US.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By Ben Rooney, staff writer

The next-generation Ford Focus will closely resemble the version sold in Europe.
Ford's fuel efficient future
Ford is taking a measured approach to rolling out electrically driven cars. We got to drive a few of the vehicles that the company has up its sleeve.
Michigan Governor Jennifer Granholm applauds Ford's investment in Wayne.

Find your next Car

NEW YORK ( -- Ford Motor said Wednesday it will spend $550 million to convert a plant, which previously produced trucks and SUVs, into a "green" manufacturing complex and build small, fuel-efficient and electric cars.

"We do not accept the notion that you cannot sell small cars here in the United States profitably," said Ford CEO Alan Mulally at a press conference Wednesday.

The automaker's Michigan Assembly Plant, in Wayne, will begin producing the Ford Focus, a compact car, in 2010. It also plans to begin making a battery-powered electric version of the Focus at the plant in 2011.

"We're changing from a company focused mainly on trucks and SUVs to a company with a balanced product lineup that includes even more high-quality, fuel-efficient small cars, hybrids and all-electric vehicles," said Mark Fields, Ford's president of The Americas, in a statement.

Ford said the plant will support about 3,200 jobs and is one of three North American factories being retooled to handle its new compact car platform.

The plant, formerly know as Michigan Truck, was used to manufacture the Ford Expedition and Lincoln Navigator SUVs. During the 1990s, when SUV sales were at their peak, the plant was one of the most profitable in the world, Ford said.

But automobile sales have plummeted as the economy has faltered and consumers shun big cars in favor of more economical models. The company said last week that sales fell nearly 32% in April from the previous year. Still, that was considered a victory because it was better than the 42% drop in sales reported by Japanese automaker Toyota (TMC).

And Ford (F, Fortune 500) has fared better than its Detroit rivals, Chrysler and General Motors. Indeed, Chrysler declared bankruptcy last week and GM (GM, Fortune 500) is being kept afloat with billions of dollars in federal loans.

For its part, Ford said the conversion is part of its "fundamental strategic shift" to bring small cars to the American market by the end of 2012. As such, it plans to eventually produce 2 million of these vehicles annually around the world.

"Our vision for Ford is green, global and high tech," said Bill Ford Jr., executive chairman, at the press conference, adding that the transition will "make a huge difference for our customers and society."

In addition to the Michigan Assembly Plant, Ford said it plans to retool its Cuautitlan Assembly Plant in Mexico to build the Fiesta subcompact early next year. It is also converting its assembly plant in Louisville, Ky., to the small-car platform by 2011.

A Ford spokesperson said the automaker is actively pursuing government aid through a Department of Energy initiative to help fund the production of fuel-efficient cars. At this time, however, no funding for this initiative has been granted to any applicant.

The decision to revamp the Michigan plant is a major boon to the state, which is struggling to revive an ailing economy, said Gov. Jennifer Granholm at the press conference.

Granholm said the new plant will help transform the state's "rust belt" image to on of a "green belt" and called Ford's investment "a balm for our soul during tough times."

The governor's remarks echoed CEO Mulally's, who said the company is "fighting for the soul of manufacturing in Michigan and the United States."  To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.