Ford Kuga to be Made in America; Could it Replace Escape?
10-24-09, 11:37 PM
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Ford Kuga to be Made in America; Could it Replace Escape?
http://www.bloomberg.com/apps/news?p...d=aeG1WWJ_Pr4s
Ford Said to Make SUV in Kentucky to Export to Europe (Update1)
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By Jeff Green and Keith Naughton
Oct. 22 (Bloomberg) -- Ford Motor Co. is moving production of a small sport-utility vehicle from Europe to the U.S. to take advantage of lower labor costs and the weaker dollar, according to three people familiar with the plan.
Ford in October 2011 will shift the Kuga model to Louisville, Kentucky, from a factory in Saarlouis, Germany, said the people, who asked not to be identified because the plan is private. As many as 80,000 a year will be exported to Europe, one of the people said. The dollar has fallen 18 percent against the euro this year, lowering the cost of U.S.-made goods.
“This makes sense because western Europe is not a particularly cheap place to make cars,” said Barclays Capital auto analyst Brian Johnson, who estimates Ford’s labor costs in the U.S. could be $10 an hour lower than in Germany. Johnson, based in Chicago, rates Ford “equal weight.” “Building a car with European specifications on a U.S. assembly line also shows the benefits of having common vehicle platforms.”
Ford, aiming to be profitable by 2011, is asking the United Auto Workers union to approve a second round of concessions this year to lower its labor costs to match Toyota Motor Corp.’s U.S. plants. The new models for the Louisville factory, which will also make the Escape small SUV, are part of the automaker’s Oct. 13 tentative agreement with the union, the people said.
“We’re not yet ready to announce which products will be sourced” in Louisville, said Mark Truby, a spokesman for Ford, based in Dearborn, Michigan.
Union Resistance
Ford is facing union resistance to the latest concessions, which workers began voting on today. To win approval, Ford offered to bring new work into 10 U.S. factories, according to a UAW summary of the tentative agreement. The Louisville assembly plant, which now makes the larger Explorer SUV, “will be sourced an incremental product with significant export volume,” the UAW summary said.
“We’ve been told we’ll receive some type of fuel-efficient vehicle based on the C-platform” used for small cars, said Rocky Comito, president of the UAW local representing the Louisville plant, who added he didn’t know the name of the models the plant will receive.
The Escape and Kuga models are code named C520 and based on Ford’s chassis for compact cars, the people said. Ford said in a July 24, 2008, press release it would convert Louisville in 2011 from an SUV factory “to produce small vehicles from the global C-car platform.”
Ratification Votes
Ford workers there will begin voting Oct. 28 on the contract changes, which include a six-year freeze on wages for new hires and a ban on strikes over wages and benefits until 2015, Comito said. Voting will conclude Oct. 30, he said.
At Ford’s Dearborn, Michigan, manufacturing complex, voting began today and concludes Oct. 30, said Ron Lare, a retiree from the automaker’s truck factory who remains active in union politics. Workers are reluctant to give additional concessions after agreeing in March to cede annual bonuses and cost-of- living increases and to accept reduced layoff benefits, he said.
About 500 workers at the Dearborn truck factory shouted down UAW Vice President Bob King yesterday by chanting “No, no, no” when he attempted to sell the latest deal, said Gary Walkowicz, a union official at the plant.
Besides the new production commitments, Ford also agreed to pay its 41,000 U.S. hourly workers a $1,000 bonus next March tied to meeting quality and productivity goals this year, according to the union’s summary of the deal.
Against Toyota
The automaker has said the concessions the union accepted in March will reduce its annual labor costs by $500 million. That deal reduced Ford’s hourly labor and benefit costs to $50, near par with Toyota’s U.S. labor costs of about $48 or $49 an hour, Ford said at the time. Ford has not said how much the latest round of givebacks would save the company.
The weaker dollar also makes U.S. production of the Kuga more profitable. The euro crossed the $1.50 threshold Oct. 21 for the first time in 14 months on optimism over a global economic recovery.
As a sign of the gains from the weaker dollar, the U.S. trade deficit unexpectedly narrowed in August as exports climbed to the highest level of the year and oil imports plunged. The gap fell 3.6 percent to $30.7 billion from a revised $31.9 billion in July, the Commerce Department said Oct. 9. Exports increased 0.2 percent to $128.2 billion, led by a $496 million gain in sales of cars and parts.
Ford Said to Make SUV in Kentucky to Export to Europe (Update1)
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By Jeff Green and Keith Naughton
Oct. 22 (Bloomberg) -- Ford Motor Co. is moving production of a small sport-utility vehicle from Europe to the U.S. to take advantage of lower labor costs and the weaker dollar, according to three people familiar with the plan.
Ford in October 2011 will shift the Kuga model to Louisville, Kentucky, from a factory in Saarlouis, Germany, said the people, who asked not to be identified because the plan is private. As many as 80,000 a year will be exported to Europe, one of the people said. The dollar has fallen 18 percent against the euro this year, lowering the cost of U.S.-made goods.
“This makes sense because western Europe is not a particularly cheap place to make cars,” said Barclays Capital auto analyst Brian Johnson, who estimates Ford’s labor costs in the U.S. could be $10 an hour lower than in Germany. Johnson, based in Chicago, rates Ford “equal weight.” “Building a car with European specifications on a U.S. assembly line also shows the benefits of having common vehicle platforms.”
Ford, aiming to be profitable by 2011, is asking the United Auto Workers union to approve a second round of concessions this year to lower its labor costs to match Toyota Motor Corp.’s U.S. plants. The new models for the Louisville factory, which will also make the Escape small SUV, are part of the automaker’s Oct. 13 tentative agreement with the union, the people said.
“We’re not yet ready to announce which products will be sourced” in Louisville, said Mark Truby, a spokesman for Ford, based in Dearborn, Michigan.
Union Resistance
Ford is facing union resistance to the latest concessions, which workers began voting on today. To win approval, Ford offered to bring new work into 10 U.S. factories, according to a UAW summary of the tentative agreement. The Louisville assembly plant, which now makes the larger Explorer SUV, “will be sourced an incremental product with significant export volume,” the UAW summary said.
“We’ve been told we’ll receive some type of fuel-efficient vehicle based on the C-platform” used for small cars, said Rocky Comito, president of the UAW local representing the Louisville plant, who added he didn’t know the name of the models the plant will receive.
The Escape and Kuga models are code named C520 and based on Ford’s chassis for compact cars, the people said. Ford said in a July 24, 2008, press release it would convert Louisville in 2011 from an SUV factory “to produce small vehicles from the global C-car platform.”
Ratification Votes
Ford workers there will begin voting Oct. 28 on the contract changes, which include a six-year freeze on wages for new hires and a ban on strikes over wages and benefits until 2015, Comito said. Voting will conclude Oct. 30, he said.
At Ford’s Dearborn, Michigan, manufacturing complex, voting began today and concludes Oct. 30, said Ron Lare, a retiree from the automaker’s truck factory who remains active in union politics. Workers are reluctant to give additional concessions after agreeing in March to cede annual bonuses and cost-of- living increases and to accept reduced layoff benefits, he said.
About 500 workers at the Dearborn truck factory shouted down UAW Vice President Bob King yesterday by chanting “No, no, no” when he attempted to sell the latest deal, said Gary Walkowicz, a union official at the plant.
Besides the new production commitments, Ford also agreed to pay its 41,000 U.S. hourly workers a $1,000 bonus next March tied to meeting quality and productivity goals this year, according to the union’s summary of the deal.
Against Toyota
The automaker has said the concessions the union accepted in March will reduce its annual labor costs by $500 million. That deal reduced Ford’s hourly labor and benefit costs to $50, near par with Toyota’s U.S. labor costs of about $48 or $49 an hour, Ford said at the time. Ford has not said how much the latest round of givebacks would save the company.
The weaker dollar also makes U.S. production of the Kuga more profitable. The euro crossed the $1.50 threshold Oct. 21 for the first time in 14 months on optimism over a global economic recovery.
As a sign of the gains from the weaker dollar, the U.S. trade deficit unexpectedly narrowed in August as exports climbed to the highest level of the year and oil imports plunged. The gap fell 3.6 percent to $30.7 billion from a revised $31.9 billion in July, the Commerce Department said Oct. 9. Exports increased 0.2 percent to $128.2 billion, led by a $496 million gain in sales of cars and parts.
10-25-09, 01:32 AM
#2
Lexus Fanatic
It looks very euro. I think Americans will need a little time to warm up to it. I think it will sell well. The Euro spec version are usually much nicer in design and interior qualities are much higher
10-25-09, 02:42 AM
#5
Lexus Champion
The unions at Ford should be happy they still have work - unlike their GM and Mopar counterparts.
It also looks like Mulally is having more faith in a "global" platform than Nasser's blowout flop the Contour...
It also looks like Mulally is having more faith in a "global" platform than Nasser's blowout flop the Contour...
10-25-09, 08:53 AM
#6
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Watching Top Gear and reading other European reviewers rant and rave about Ford handling, quality, and fit and finish always make me annoyed. You'd think that Ford US would either get their **** together (which they have been doing a lot better job of lately I must say!) or just import the better stuff back here to the states.
10-25-09, 06:30 PM
#7
Lexus Fanatic
Watching Top Gear and reading other European reviewers rant and rave about Ford handling, quality, and fit and finish always make me annoyed. You'd think that Ford US would either get their **** together (which they have been doing a lot better job of lately I must say!) or just import the better stuff back here to the states.
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10-25-09, 06:35 PM
#8
Lexus Fanatic
nthach as a point.....in the meantime, the UAW, here in America, at least until the economy recovers some more, should take what work it can get here in America, and be thankful that new jobs are coming in at all.
10-26-09, 02:31 PM
#11
Lexus Fanatic
So, as far as assigning "fault" goes, it's mostly a matter if the manufacturer want to spend the money to Federalize their Euro-spec cars, if they think it is worth it, and if they feel that there is a potential market for them here. In Alfa's case, for instance, it simply boiled down to a lack of sales (and a reputations for unreliability). Their last year in the American market (94-95) produced only some 950 sales. That's why we didn't get that hot new 300 HP AWD Focus here in America......Ford planners decided that the costs of Federalizing it, and the intense competition it would receive from the already-established Subaru STi, Mitsubishi Evo, and some of the hotter VW GTIs was just too much.
I do wish, though, that manufacturers would consider bringing over more of their European diesels here. Even with the costs of Federalizing them, it would be a convienient way of meeting the new 2015-16 CAFE rules without having to develop all-new vehicles or expensive hybrid powertrains. This issue, BTW, is currently being discussed in the Mazda diesel thread that you recently posted.
Last edited by mmarshall; 10-26-09 at 02:37 PM.
10-27-09, 08:50 AM
#13
Lexus Fanatic
10-27-09, 07:40 PM
#14
^^ Mercury has nothing. They are identical twins to Ford's offerings, for a little extra price. Ford really needs to decide between keeping the brand and doing something with it or just giving it the axe. I would love to see Mercury come out with a new Marauder or Cougar, or just something unique. Unfortunately I just don't see any of this happening. Come on Ford, let's see Lincoln and Mercury be reinvigorated like Buick and Cadillac are!
10-27-09, 07:56 PM
#15
Lexus Fanatic
Credit that to bad management on Ford's part. They have (unnecessarily) dropped much of what they DID offer. They are like a soldier out on the battlefield that tosses out his K-Rations, then wonders why he doesn't have anything to eat. 
Mercurys, in general, are a little nicer, with plusher trim, than the average Ford. They also, traditionally, appeal to a somewhat older core buyer-group.
Many traditional Mercury customers are not interested in Fords....they stick with their brand. That's why I can't understand why Ford management forced Mercury to drop the Sable and Grand Marquis....they are biting some of the hands that feed them, although, admittedly, Ford, to their credit, unlike GM/Chrysler, DID get through the current crisis without government money.
Agreed. 
But if they bring back the Cougar, it should be a REAL Cougar, preferably Mustang-based, not just a two-door coupe version of an existing sedan platform, like they did with the old Contour/Mystique. That "Cougar", to put it bluntly, was a joke, even with the V6. I remember reviewing and test-driving one, though I didn't write it up.
Let's also not get too far off-topic. The thread is about the Ford Kuga and the possibilities (?) of becoming a U.S. Ford model (or a Mercury).
They are identical twins to Ford's offerings, for a little extra price.
Many traditional Mercury customers are not interested in Fords....they stick with their brand. That's why I can't understand why Ford management forced Mercury to drop the Sable and Grand Marquis....they are biting some of the hands that feed them, although, admittedly, Ford, to their credit, unlike GM/Chrysler, DID get through the current crisis without government money.
Ford really needs to decide between keeping the brand and doing something with it or just giving it the axe. I would love to see Mercury come out with a new Marauder or Cougar, or just something unique. Unfortunately I just don't see any of this happening. Come on Ford, let's see Lincoln and Mercury be reinvigorated like Buick and Cadillac are!
But if they bring back the Cougar, it should be a REAL Cougar, preferably Mustang-based, not just a two-door coupe version of an existing sedan platform, like they did with the old Contour/Mystique. That "Cougar", to put it bluntly, was a joke, even with the V6. I remember reviewing and test-driving one, though I didn't write it up.Let's also not get too far off-topic. The thread is about the Ford Kuga and the possibilities (?) of becoming a U.S. Ford model (or a Mercury).