Ford has just declared that it will be moving its production of Focus small cars as well as C-Max out of its current Michigan Assembly Plan in 2018, Reuters has learned. This statement comes just as the company had declared that it will be spending around $2.5 billion for engine and transmission plans in Mexico three months ago. Currently, Ford assembly plants in Mexico are already making midsize Fusion sedans and small Fiesta cars.
Ford’s Michigan Assembly Plant has around 4,400 employees. It regularly assembles the Focus and C-max cars in gasoline, electric and hybrid variants. In the past, it used to build SUV’s and light trucks. Moreover, Ford had already split the production of the Focus between assembly plants and Michigan and Mexico earlier, according to The Wall Street Journal.
However, there is absolutely no sign that Ford will abandon its Michigan Assembly Plant. Instead, it may just give it another SUV or car model to assemble. In fact, Ford Spokeswoman Kristina Adamski has told Reuters, “We actively are pursuing future vehicle alternatives to produce at Michigan Assembly and will discuss this issue with United Auto Workers leadership as part of the upcoming negotiations.”
The United Auto Workers union represents over 100,000 American auto workers in auto assembly, engine, stamping and powertrain plants. In the automotive sector, it represents auto workers from Ford, Chrysler, General Motors and Mitsubishi.
Furthermore, Adamski has also told Reuters that Ford needs to make decisions on production that will ensure that they remain competitive. And as far as competitiveness goes, Ford has said that with the Ford Focus, “the company has one of the best-selling vehicle nameplates in the world” in its Annual Report for 2014. Meanwhile, Ford Fiesta was among the top-selling subcompact cars around the world last year. Furthermore, the automotive revenue for Ford last year was reported at $135.8 billion with a pre-tax profit of $1.9 billion.
For the month of June, Ford had reported an increase of up to 10% in the sales of its SUV models. Moreover, compared to last year, sales for both the Ford Edge and new Explorer had increased by 30%. Meanwhile, the sales of Mustang also increased by 54%, reflecting the car model’s best sales performance yet since 2007. In addition, Lincoln retail sales also experienced an increase of 20%.
The Wall Street Journal reports that small cars, although profitable, are not able to deliver as much profit margins to Ford, as its pickup trucks and SUV’s. Moreover, they are having a difficult time competing with Asian auto makers who readily provide small cars with lower costs. There are reports stating that Ford may move the assembly of Ford Focus and C-W outside the US.