Week of December 1, 2003
  Blockbuster Deal
   from Site Selection's exclusive New Plant database

$325M More for Michigan, Ohio Plants

Hermosillo, Mexico
Futura production will add as many as 2,000 employees in Hermosillo (pictured), the northwestern Mexican site where Ford's 2,100-worker plant opened in 1986.
Back to the Futura: Ford Adding
2,000 Jobs in
$1B Mexican Project
by JACK LYNE, Site Selection Executive Editor
of Interactive Publishing

HERMOSILLO, MexicoFord Motor Company (www.ford.com) has mapped out two major parts of its future: the new Futura midsize model and the Hermosillo, Mexico, assembly plant that will be the first to build it.
        The nation's second-largest automaker is fusing those two together with an investment of as much as US$1 billion, revamping the Mexican operation's production system and building a huge supplier park. The project, Ford officials explained, will add as many as 2,000 new jobs at the Hermosillo plant, almost doubling its current work force.
        Simultaneously, Ford has decided to invest as much as $325 million to build an all-new six-speed transmission at its plants in Livonia, Mich., and Sharonville, Ohio.
        All three investments are part of Ford's drive to reinvent its manufacturing modus operandi. The automaker is installing new flexible manufacturing systems at the Hermosillo, Livonia, and Sharonville plants that can change products and options far more rapidly to meet market demand.
Ford Futura
Ford will build as many as 800,000 vehicles a year off of the platform for the Futura (shown above in an artist's sketch).

        Ford Powertrain Operations Vice President Dave Szczupak calls the conversion "the most dramatic change in manufacturing since the introduction of the assembly line by Henry Ford."

Futura Integral to Ford's Plans for
65 New Products in Next Five Years
The Hermosillo plant's Futura introduction is central to the "Revival Plan" that Ford announced in January of 2002. The Mexican project reflects one of that plan's chief tenets: bringing out new vehicles far faster.
Ford President and CEO Nick Scheele
"The Hermosillo plant has a reputation as a high-quality, efficient facility," Ford President and CEO Nick Scheele (pictured) said in explaining the Mexican plant's selection for Futura production.

        "As one of 65 new products Ford will introduce during the next five years in North America, the Futura is an important addition to Ford's remarkable range of new products," Ford President and CEO Nick Scheele said at the press conference at the Hermosillo plant to announce the project.
        That "65-in-five" strategy is also greatly broadening product ranges inside Ford plants. The reworked Hermosillo operation typifies that more expansive range, with the Futura only part of the product mix. The new system will be able to build up to eight different models off two platforms.
        "Hermosillo will have the ability to change the mix, volume and options of products in response to consumer demand and market segmentation with minimal investment and changeover loss," said Scheele.
        In addition, the midsize Futura that's replacing the Taurus is part of Ford's multiple-platforms plan. The new model first made in Hermosillo will be the basis for at least 10 new Ford, Lincoln and Mercury models over the next several years, Scheele noted. All told, up to 800,000 new models a year will be built off the Futura platform, he said.
        In addition to common platforms, Ford's flexible system will include common engine and transmission architectures, as well as numerically controlled machine tools that can be rapidly retooled and reprogrammed to perform new tasks with minimal production disruption. All plants will also have common manufacturing tools and methods.
bd031201d.jpg - 6319 Bytes
The new flexible manufacturing system in Hermosillo is "the most dramatic change in manufacturing since the introduction of the assembly line by Henry Ford," asserted Ford Powertrain Operations Vice President Dave Szczupak (pictured). Photo: Ford Motor Company

        And Ford officials are hoping for another commonality: big savings. The automaker has estimated that the flexible manufacturing system over the next decade will save it up to $2 billion a year in North America.

Mexican Plant Will Be Able to Make
300,000 Modified-Mazda Units a Year
Ford is basing the Futura's architecture on a modified design of the critically acclaimed Mazda6. The Dearborn, Mich.-based automaker owns a 33.4-percent stake in Mazda.
        The Mazda6 link marks something of a strategic turnaround. Ford once viewed the Japanese company as its key Asian market entrée. Now, the American automaker has turned to a modified Mazda model for help in fixing its ailing U.S. operations.
        With its new production system, the Hermosillo plant will be able to build up to 300,000 of those units a year, more than doubling current capacity.
        "The Hermosillo plant has a reputation as a high-quality, efficient facility, and with the addition of Futura, it will be a leader in flexible manufacturing and supplier innovation," Scheele said of the Mexican plant's selection for the project.
        Opened in 1986, the northwestern Mexican operation has won a number of honors, including Ford's President's Global Quality Award in 2002 and the automaker's Global Health and Safety Award in 2001.
        "We have a great work force at Hermosillo," said Ford Mexico President and CEO Marcos de Oliveira. "We are honored to be entrusted with building the Ford Futura."

Project Ups Ford's Paltry Mexican Production
Ford, too, is surely glad to see more building at the Mexican plant. Many auto industry analysts see the Hermosillo operation as significantly underutilized. The plant, which makes the Focus ZX3, ZX5 and SVT, in 2002 produced only 120,388 vehicles, most exported to the U.S. and Canada.
        Similarly, Ford's output from its two Mexican assembly operations has sagged dramatically during the economic downturn. Ford Mexico officials expect that the company will produce some 150,000 vehicles in the country this year. That marks a considerable drop-off from 185,874 units from 2002 - and an even sharper slump from the century's first few years. Ford's Mexican production totaled 280,585 units in 2000 and 239,690 units in 2001.
        The Hermosillo expansion also brings Ford's cost-cutting Mexican production more in line with its major U.S.-based competitors. The Chrysler Group assembled 16.4 percent of its North American-built vehicles in Mexico last year, and General Motors assembled 10.1 percent, according to analysts with Ward's Communications (www.wardauto.com). By comparison, only 4.4 percent of Ford's North American-built vehicles were assembled in Mexico in 2002.
        Mexican suppliers are also getting in on the Ford action. Sixteen Mexican-based firms will invest in expansions to support the expanded Hermosillo operation, Ford officials said. Another 19 tier-one suppliers will be located in the 1.75-million-sq.-ft. (157,500-sq.-m.) park that Ford will build near the plant.
        Hermosillo's Futura production will begin in 2005, Ford officials said.
        Futura's assembly locations were a major issue in the automaker's negotiations with the United Auto Workers (UAW at www.uaw.org), which produced a new four-year U.S. deal in September. But Ford is certain to include some of its American plants in the projected 800,000 units of Futura-platform-based production.
        One of them will be the assembly operation in Hapeville, Ga. One of Ford's major concessions in its UAW deal was moving production of two Futura-based sport wagons from Canada to the Atlanta-metro plant.

Michigan, Ohio Expansions: Six-Speeds
Part of the Automotive Wave of the Future?
By comparison, Ford's Michigan and Ohio expansions are part of the rollout of a new rear-drive six-speed automatic transmission. The automaker says that it will invest about $170 million in the 3.3-million-sq.-ft. (297,000-sq.-m.) Livonia plant and some $155 million in the 2.4-million-sq.-ft. (216,000-sq.-m.) Sharonville operation.
        "These new transmissions provide an average of 4 to 8 percent improvement in fuel efficiency over a traditional four-speed automatic, so this is a trend with environmental impact worth noting," Ford Executive Vice President and President of the Americas Jim Padilla said of the two expansions. "What we are trying to do with the new vehicles we introduce is to maximize our impact in improving fuel efficiency, thereby reducing CO2 emissions as well."
        Ford hasn't said how many - if any - new jobs might be added in fitting the two plants with flexible production systems. The Livonia plant currently employs some 2,400 workers, the Sharonville plant some 2,200. Both will begin making the new engine in 2005.
        The Ohio and Michigan plants' high-tech manufacturing systems will include a "birth history" approach that tracks all components as they move through production. Each part will be monitored by radio-frequency-identification technology. If a problem is identified, the system will facilitate tracing the part to its source; all relevant production parts from that source will then be removed.
        Similar technology is already used in Ford's engine plants Chihuahua, Mexico; Dearborn, Mich.; Essex, Ont.; Valencia, Spain; and Windsor, Ont. "By 2008, more than 60 percent of Ford's transmissions will be new, including new six-speeds and continuously variable transmissions," Padilla added.
        This is the first time, though, that the automaker is using the system for a six-speed transmission. Though rare now, six-speeds are part of the automotive wave of the future, said Szczupak.
        "Today, less than 1 percent of all vehicles sold in North America have six-speed automatics, so this is a unique transmission," he explained. "By 2010, 15 to 20 percent of vehicles sold in North America will have six-speeds. And by 2015, it will be about 50 percent.
        "Twenty-five years ago," Szczupak noted, "the average American was driving a car with a three-speed automatic."

bd1201bbd1201b ©2003 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.