Ford to invest $75 million converting SUV plant to produce small cars

  Ford Motor Co. will invest at least $75 million to begin converting a Michigan sport-utility-vehicle plant to small-car production as part of its strategic shift to sell more of the fuel-efficient vehicles in North America starting in 2010.

Work to revamp the 51-year-old Michigan Truck Plant, located in Wayne, Mich., will start in November when equipment now used to build the Ford Expedition and Lincoln Navigator SUVs is moved to the auto maker’s Kentucky Truck Plant. Navigator and Expedition production at that plant is to resume in the second quarter of 2009.

The $75 million investment will be used to retool the plant’s body shop. The auto maker will make additional investments to upgrade other functions such as the assembly line, said Ford manufacturing chief Joe Hinrichs.

The 1,000 Michigan Truck workers will transfer to the Wayne Assembly Plant in January, where a third shift will be created to boost production of the Ford Focus. Once the conversion is complete, Michigan Truck workers will return to their plant to produce a new product and augment the Focus output when needed.

The investment and conversion are part of Ford Chief Executive Alan Mulally’s plan to overhaul the auto maker in response to a decline in pickup-truck and SUV sales in the U.S. The auto maker, which posted an $8.7 billion second-quarter loss, is betting that revamping three production plants and introducing six of its European models in the U.S. starting in 2010 will help the company return to profitability. Mr. Mulally was forced in June to scrap the company’s goal of restoring full-year profitability in 2009.

Ford’s Cuautitlan Assembly Plant, located in Mexico, is to begin building a Fiesta subcompact car in 2010. The plant currently produces the F-Series pickup trucks. The Louisville Assembly Plant, located in Kentucky, also will begin producing a new small car in 2011. It is now home to the Ford Explorer.

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