Ford Wins Fix for Labor, Manufacturing Excesses – But Products are Yesterday’s News

Ford Wins Fix for Labor, Manufacturing Excesses – But Products are Yesterday’s News

By Bill Visnic

Okay, so Ford Motor Co. has a brand-new four-year agreement with the United Auto Workers union that markedly cuts the company’s labor liabilities.

November’s handshake with the UAW also brings the union’s blessing to pare Ford’s U.S. manufacturing footprint to just nine assembly plants; the company already has shuttered four major U.S. plants and will close another in 2009 as it right-sizes itself to a near-term market share projected to be around 15 percent. As recently as 2002, Ford share exceeded 20 percent.

But with Ford shedding costly and unproductive manufacturing capacity (and the associated workers, unfortunately), the next problem emerges: much of what’s being built in Ford’s remaining UAW-represented plants is yesterday’s news.

CEO Alan Mulally stresses that savings from the new labor agreement – along with vital new investment to install flexible-manufacturing tooling in all its plants – will enable Ford to accelerate new-product development. That acceleration needs to get started: the Mustang and the F-150 pickup line are the company’s only absolute winners, and even those perennial segment-dominating models are coming under pressure from a flagging U.S. market and ongoing concern about fuel prices.

An assessment of the plants that will take Ford through the pivotal next four years of its restructuring and the vehicles they produce, or are likely to be producing:

Auto Alliance, Flat Rock, MI

Currently producing: Ford Mustang, Mazda6
Hourly workers: 3,230

Outlook:

This 50/50 joint-venture between Ford and Mazda Motor Corp. (of which Ford owns 33%) currently is a linchpin for both.

The Mustang’s place in the cosmos needs no explanation, but Ford insiders are wrestling with what to do when the current Mustang, launched in 2005, gets its first significant freshening in 2010. Through October, Mustang’s numbers are off a disturbing 18 percent for the year; by the end of October in ’06, the ‘Stang had galloped past 145,000 units, but hadn’t reached 120,000 this year. Ford engineers and planners must crack the code to keeping the Mustang fresh – the industry’s perpetual problem with affordable coupes. And GM’s all-new Camaro is looming on the horizon, the first real competition for the Mustang since the F-body Camaro was deep-sixed in 2002.

With the upper-midsize Taurus and Taurus X sputtering (see below), one intriguing possibility centers around on-and-off talk of stretching the Mustang platform to make an affordable rear-drive sport sedan – a poor-man’s BMW 3-Series, if you like.

Mazda, meanwhile, is on the cusp of reengineering the Mazda6’s successful CD3 platform next year, and given Mazda’s recent demonstrations chassis-engineering prowess, the revised CD3 is expected to be good stuff. It looks like fairly smooth sailing for Auto Alliance, which earns extra marks for seamlessly integrating production of front-drive and rear-drive vehicles.

Grade: A-

Chicago Assembly, Chicago, IL

Currently producing: Ford Taurus/Taurus X, Mercury Sable
Hourly workers: 2,174

Outlook:

It’s difficult to say how long Ford will stay loyal to these dogs, built in its oldest existing U.S. plant. On one hand, they’re the bread-and-butter, front-wheel-drive midsizers that, for better or worse, Ford must pitch against vastly better-executed – not to mention more attractive – mainstream sedans such as the Honda Accord, Toyota Camry and even the Hyundai Sonata.

But these cars (originally the Five Hundred), with their dowdy styling and groaning powertrains (since remedied), were losers out of the gate, and are based on expensive and heavy Volvo-derived platforms Ford surely now wishes it hadn’t used. Making matters worse, the Ford Fusion, launched for ’06 but based on a platform already several years old, is outselling the Taurus nameplate by better than two-to- one.

Further complicating matters is the addition of the ’09 Lincoln MKS to the mix at Chicago assembly; the MKS also employs this platform, and although it’s somewhat easier on the eyes than the Taurus family, the MKS doesn’t appear to be a brand-enhancing expression – mechanically or stylistically – for Lincoln.

Ford has to try something new – the UAW says it has a new-product commitment here – but it won’t happen until planners can figure out where and how to position a replacement.

Reviving the Taurus nameplate hasn’t resuscitated this odd duck’s sales, which are tracking toward a meager 75,000 units, so it’s probable Ford will back the Fusion in the midsize-sedan battle and turn product-development dollars in a totally different direction – a new-age rear-drive sedan to replace the forlorn Crown Victoria, or a car platform-based rendition of the Explorer.

Grade: D

Dearborn Truck, Dearborn, MI

Currently producing: Ford F-150, Lincoln Mark LT
Hourly workers: 3,080

Outlook:

The next-gen F-150 is in waiting in the wings (we’ll see it in January at the Detroit auto show), and Ford has yet to truly screw up a new version of its all-time best-seller, so Ford’s newest plant (2004) is well-placed.

The only cloud on the horizon is the industry-wide angst about sustaining the plump volumes fullsize pickups have conditioned the Big Three to expect. F-series sales are off a painful 12.5 percent through October and total sales are going to be the lowest in recent memory, adding to the hand-wringing. Like its Detroit counterparts, the ratio of Ford’s sales and production accounted for by fullsize pickups and SUVs is Worry No. 1 going into 2008 and beyond.

Grade: B

Kansas City Assembly, Claycomo, MO

Currently producing: Ford Escape, Mercury Mariner, Mazda Tribute, F-150
Hourly workers: 4,433

Outlook:

Ford is tracking to push past 200,000 units this year with the aging Escape and Mariner compact crossovers, as these models, though aging, are well-positioned for customers looking to downsize. An effective restyle and interior makeover for ’08 – combined with the recent addition of hybrid variants – further boosts the prospects for these models and this plant, evidenced by the fact the Escape monthly sales now typically surpass those of Ford’s former SUV franchise player, the Explorer.

Further out, the Escape/Mariner is likely to morph into an even more car-like crossover suggested by some of Ford’s recent concept vehicle. The beauty of crossovers is that with a little automotive-engineering Botox, they are altered with relative ease to be positioned towards whatever portion of the car/truck spectrum is in favor with customers.

Moreover, the Kansas City plant is one of several Ford has earmarked to benefit from new flexible assembly lines that make it a strong bet for the future. UAW documentation claims the next-gen F-150 also will stay here through its lifecycle.

Grade: A-

Kentucky Truck, Louisville, KY

Currently producing: F-Series Super Duty, F-Series medium duty
Hourly workers: 4,700

Outlook:

For a while there, it seemed even your grandmother was eying up a Super Duty. And there was time when Ford was convinced the now-defunct Excursion was a righteous piece of product development.

The market and public perception have shifted, of course, and not many folks seem to be considering a Super Duty as daily transportation any more. So while the efforts to mainstream these leviathans have been wisely shelved, the “original” market remains – but the meteoric year-over-year sales increases won’t be back.

Kentucky Truck is another plant slated for a new, flexible body shop – and it will need it. Long-rising fuel prices, a shift in consumer attitudes and a slumping economy seem certain to cut into medium- and heavy-duty truck volumes; Ford may need to bring in other product or cut production.

Grade: C

Louisville Assembly, Louisville, KY

Currently producing: Ford Explorer/Explorer Sport Trac, Mercury Mountaineer
Hourly workers: 2,900

Outlook:

You can see the old-school Explorer puking out the last of its life, a dinosaur being pulled inexorably into the tar pits of a market eager to give up its stone-age, trucky SUVs and evolve to something more civilized. Anyone doubting the reign of the dinosaurs is over need look no further than the precipitous 23.8-percent drop in Explorer sales so far this year; Ford’s looking at losing upwards of 50,000 sales by the end of the year.

The writing is on the wall: even the staunchest Explorer buyers are heading elsewhere – perhaps right to a car-based “SUV” on the same showroom floor, the smaller and more frugal Escape. Through October of this year, Escape outsold Explorer every month except January, when it Explorer won by 82 units.

So here’s where it gets mighty interesting: what replaces the Explorer, the vehicle that has defined “SUV” since its introduction almost two decades ago? GM already has in place its succession plan for its body-on-frame Tyrannosaurus, the Trailblazer. The epitaph is written for Chrysler’s Durango. Does Ford have anything in development that can ring up a couple hundred thousand units when the current Explorer breathes its last around 2010?

Ford has shown some vaguely-suggestive concepts, but it has the Canada-built Edge (and Lincoln MKX), a unibody crossover effectively already positioned in the Explorer’s territory, but Edge is based on front-drive architecture. Although it seems unlikely the company needs another midsizer of any ilk – and Ford’s crossover lineup already is crowded, what with the Escape immediately below the Edge – but industry sources say Ford likely will unveil a concept SUV sitting on a unibody structure and waving the Explorer nameplate, in 2008. 

Louisville also is getting a flexible body shop. The new, lower-cost labor arrangement could make possible building any number of future models, but one thing seems certain – this plant eventually needs to be making something smaller and more contemporary than today’s truck-based Explorer.

Grade: B-

Michigan Truck, Wayne, MI

Currently producing: Ford Expedition, Lincoln Navigator
Hourly employees: 1,420

Outlook:

The world – okay, this country, at least – needs a certain number of fullsize SUVs. People haul stuff. The   automakers always show press photos of these things towing horse trailers, so horses have to get around. And big families who won’t go minivan.

This segment is one of the last bastions of Detroit-ness, and Ford is determined to force GM’s Suburan/Yukon and Cadillac Escalade to share. Once Ford and GM have some perspective on near-term market demand – what that is three years from now, your guess is as good as ours – the segment is likely to remain reasonably consistent. Just don’t expect numbers from the glory days of the late ’90s.

As far as we know, Ford doesn’t have an Expedition/Navigator redesign penned in until around 2012, and the UAW says Ford has promised Michigan Truck will see new product “allocated during the life of the agreement.”

Grade: B-

Ohio Assembly, Avon Lake, OH

Currently producing: Ford E-Series commercial vans and cutaways
Hourly workers: 2,441

Outlook:

Originally on the Way Forward chopping block, Avon Lake is pulled from the brink and gets a brand-new flexible body shop to boot.

We can only assume this means Ford believes it can, will, or must use portions of this capacity for other purposes – Ford has built plenty of light-duty vehicles here in the past. The E-Series products enjoy a fairly serious makeover for ’08, but we’ve got to wonder about the ultimate goal for this underutilized operation, considering it originally was on Ford’s “hit list.”

Grade: C

Twin Cities Assembly, St. Paul, MN

Currently producing: Ford Ranger, Mazda B-Series
Hourly workers: 1,040

Outlook:

Ford will continue with plans to close theTwin Cities site, but has delayed closing from 2008 until 2009.

Capacity here represents another looming chasm in Ford’s product lineup: although Ranger sales have stumbled to an annual pace of around 70,000 units, Ford appears to have no discernable replacement.

The entire matter of midsize pickups will be one of the domestic industry’s most fascinating product-development issues in the coming few years. The segment has dropped hugely, yet aggregate U.S. sales of midsize pickups, still approaching a half-million units thanks to several import nameplates, hardly is a number to dismiss.

A probable scenario sees Ford, GM and Chrysler shifting to some type of newer architecture, perhaps a car-based unibody design similar to Honda’s Ridgeline, and melding crossover-SUV attributes. Thanks to its new flexible-assembly capabilities, Ford, for example, thus could shift production of a next-generation midsize pickup to just about any plant it pleases.

Grade: F

Wayne Integrated Stamping and Assembly, Wayne, MI

Currently producing: Ford Focus
Hourly workers: 2,704

Outlook:

In the new labor agreement, Ford’s Wayne operations also earned a stay from the Way Forward axe; this longstanding assembly plant stays open and will get a new body shop. Now Wayne desperately needs a new model, and needs it quick.

Industry sources have suggested lower labor costs tilted the equation to keep Wayne rather than invest in a previously planned but politically volatile all-new assembly plant, probably in low-wage Mexico.

With its flexible body shop, Wayne is the focus of several possibilities.

First and most likely, it could begin production of the current European Focus – that uses a derivation of the tasty global C1 platform – to replace the existing Focus currently built at Wayne. An awful planning blunder saw Ford retain the hoary CW170 underpinnings for the U.S. Focus, while the rest of the world   (including the Mazda3) got the infinitely better-engineered C1 Focus.

And there is talk Wayne also could build – instead of, or alongside the Focus – an all-new B-segment vehicle, a model Ford desperately needs to do battle with a number of strong Japanese models such as the Honda Fit and Nissan Versa, not to mention the coming volley from its Detroit rivals. That model, sharing architecture with the Mazda2, reportedly is earmarked for a 2009 launch. Better late than never, as they say.

Grade: C+

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.