Louisville, KY Ford Plants to Shift Production

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1 Louisville Ford plant will switch from SUVs to small cars; 1 gets SUVs from Michigan plant

LOUISVILLE, Ky. July 24, 2008; Brett Barrouquere writing for the AP reported that Ford Motor Co. is going down the road ahead with Kentucky.

The automaker announced on Thursday that the Louisville Assembly Plant, which makes the Ford Explorer midsize SUV, will be getting a flexible body shop and begin making smaller, fuel-efficient cars to sell in the United States by 2011.

The new vehicles will be similar to the European Focus.

Ford, successful at selling cars in Europe, is banking on new European models to boost sales and revenue as it deals with a market shift from trucks to cars brought on by high gasoline prices.

The struggling automaker is also moving production of the Lincoln Navigator and Ford Expedition from Michigan to the Kentucky Truck Plant in early 2009. The Kentucky Truck Plant currently makes Ford Super Duty pickups.

Louisville Mayor Jerry Abramson said Ford will invest $100 million in the Kentucky Truck Plant. The investment will give flexibility to the city's two Ford plants that will keep production lines moving well into the future, Kentucky Gov. Steve Beshear said.

"The company is betting the success of its future and the future of the auto industry on Louisville, Ky.," Beshear said.

The announcement Thursday marks a turnaround for the Louisville plants since 2006, when they were considered by Ford as candidates for closure.

"When it comes to Ford Motor Co., Louisville has had more lives than most cats when you consider what we've had to go through," Beshear said.

Abramson said the city and state used financial incentives to lure Ford into investing in the local plants. Those incentives haven't been finished, but should be made public in a few weeks, he said. Also, the city and state are working on a job retraining package for Ford employees, Abramson said.

"We've been working on a significant package to focus on the retraining of people who will work on the new C-class cars," Abramson said.

The two plants employ about 6,000 people, making Ford one of the city's largest private employers. Abramson said Ford will continue the buyouts of some employees that are in progress and that the number of people working there may fall during the restructuring. But Abramson said once the retooled plants are online, the employment figures are expected to rise.

"There may even be opportunities for expansion of jobs in our hometown," Abramson said.

The news of new products to be built in Kentucky drew praise from United Auto Workers representatives. UAW Local 862 and Ford agreed earlier this year to allow employees to work alternate shifts, which avoided layoffs.

UAW Local 862 President Rocky Comito said Thursday's announcement validated that move.

"The things the employees have had to make concessions over in the last 18 months proved worthwhile, given what we heard today," Comito said. "There's a light now at the end of the tunnel in two years."

Ford's director of manufacturing operations, Bill Russo, said Thursday both plants will shut down while new equipment is installed and workers are trained for the new product lines.

"That doesn't mean all the employees will be absent," Russo said.

Russo says the moves will make both plants more flexible and able to handle a wider range of products in the future. But Russo would not say which new line of cars would be made in Kentucky.

"We're not speaking yet of specific products," Russo said.

The announcement came on the same day that Ford posted the worst quarterly performance in its history, losing $8.67 billion in the second quarter.

The second-quarter loss surpassed Ford's previous record quarterly loss, $6.7 billion in the first quarter of 1992.

Abramson, Beshear, Kentucky Economic Development Secretary John Hindman and Greater Louisville Inc. President Joe Reagan flew to Michigan in early April to meet with Ford executives about the two plants. Ford has been meeting with Louisville and Kentucky officials each month since then about the incentive package.

But until Thursday, Ford made no commitments to Louisville about the future of the plants, Beshear said.

"I just think we outworked a lot of people," Beshear said. "Until today, the plans weren't set in stone."

Associated Press writers Dee-Ann Durbin and Tom Krisher in Dearborn, Mich., contributed to this report.