Facing intense global competition, decreased market share, rising operating costs, and excess U.S. industrial capacity, Ford Motor Company has announced it will drastically change the way it conducts business. Ford is implementing its Way Forward revitalization plan, a strategy to allow it to introduce new products, cut costs, and return the company’s North American operations to profitability.
With facilities throughout North America, Ford is examining where to cut and where to invest and place new product programs. As part of this effort, Ford will make investments totaling $866 million in six Michigan plants. The investments will bring flexible manufacturing and advanced powertrain production to the plants, which include facilities in the cities of Dearborn, Livonia, Wayne, and Woodhaven.
The investments, which represent the first part of a $1 billion commitment announced in August 2006, are supported by a Michigan Economic Development Corporation incentive package of $151 million. In addition, the state and local communities are considering additional property tax abatements.
A University of Michigan economic analysis estimates that increased economic activity created by the investment would save an additional 42,460 indirect Michigan jobs in addition to the up to 13,740 retained directly by the company. The project is expected to generate more than $62 billion in personal income for Michigan workers over the life of the tax credit.
“Our turnaround in North America and our return to profitability is based on strategic investment, not just cost cutting,” said Mark Fields, president, The Americas, Ford Motor Company. “With this investment, we’re expanding our commitment to small cars, producing fuel-efficient powertrains and fortifying our truck leadership.”
“With these investments and a focused and committed workforce, we stand ready to deliver the cars and trucks that people want,” said Joseph Hinrichs, vice president, North America Manufacturing. “We’re solidifying our manufacturing base and positioning ourselves for future growth.”