Ford hires 5,200 while pushing factory use to 114% of capacity
Photo credit: Ford Motor
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DETROIT -- Ford Motor Co. has added about 5,200 jobs this year in its U.S. factories, and its North American plants are operating at 114 percent of capacity, the highest in more than three decades.
"Our manufacturing costs have gone down this year," Jim Tetreault, Ford's vice president of North American manufacturing, told reporters today at an event held at Ford's Michigan Assembly Plant in Wayne, Mich.
"Two things are driving that, capacity utilization and entry-level workers. No question, those two things have lowered our costs."
Ford's contract with the UAW allows the automaker to pay new hires about $16 an hour, less than 60 percent of what veteran workers receive. Ford has added about 4,800 of those entry-level workers to its payroll this year, said Todd Nissen, a company spokesman.
The remainder of the new jobs went to workers transferring from other Ford factories or coming out of the "jobs bank" of employees who didn't have job assignments. Ford's jobs bank is now empty, Tetreault said.
Ford's is running its factories at their highest level of utilization in Tetreault's career at the automaker, which spans more than 30 years, he said. Ford has added third shifts of workers at five North American assembly plants.
Ford is adding a shift of 1,200 workers at its Flat Rock, Mich., factory next year. Asked if Ford will need more workers and capacity as U.S. auto sales grow, Tetreault said: "Stay tuned."
Flexible assembly
During today's event at the Michigan Assembly Plant, Ford marked the production launch of its latest plug-in hybrid at a former SUV factory that now serves as a model for the automaker's global manufacturing strategy.
With production of the C-Max Energi, the plant is now the only factory in the world to build gas-powered, hybrid, plug-in hybrid and electric cars all on the same production line, according to the company.
"In the future, globally, we'll have plants that produce multiple platforms, multiple powertrain choices and multiple body styles," Tetreault said.
Michigan Assembly is the latest illustration of Ford's strategy to retool plants and train workers to build a wider range of models. The move lowers Ford's production costs, while allowing it to adapt more quickly to changes in consumer demand.
The flexibility at Michigan Assembly, which can build five body styles on two platforms, is key as Ford offers electric and hybrid cars whose sales have been unpredictable.
"We didn't want to get trapped in having dedicated lines for electrified vehicles and dedicating all that capital to a single line of vehicles," Tetreault said.
Ford announced in May 2009 that it was spending $550 million to overhaul the 55-year-old plant, which made the Expedition and Lincoln Navigator full-size SUVs. Now, Ford makes the C-Max hybrid and plug-in as well as electric and gas-powered versions of the Ford Focus compact car.
This includes a sport version of the Focus that gets 252 horsepower, which Tetreault calls the "wild Focus."
Surgical presentation
More than 80 percent of the tooling at Michigan Assembly's body shop can weld a variety of body styles, while the layout of the trim area has been revamped so workers have more time to install complex high-voltage wires or EV batteries.
At the start of 2010, Ford created a matrix chart dubbed "the plan for every person" that tracked the training needs of every worker. Some workers went through months of training to learn how to repair models with different powertrain systems.
Ford also brought the design and production of key electrified components in house this year. The Van Dyke Transmission Plant started building hybrid transmissions, while the Rawsonville Plant assembles battery packs.
These changes shaved 20 percent from development costs and the costs will likely fall further as the factories become more efficient. In Rawsonville, for example, workers were able to go from nine jobs an hour to 19 jobs over the last two weeks.
This boost was partly because workers were given two nail guns, instead of one, to secure the fixtures around the battery pack cover. Each bolt was a different size and a second tool cut down on time needed to adjust the gun for his bolt.
"We want to get to surgical presentation almost," Tetreault said. "A surgeon reaches out and someone slaps an instrument in his hand. That's what you want the operators doing. You don't want the operators moving a single step to get a part."
Moving goal posts
Ford's strategy differs from those of General Motors Co. and Nissan Motor Co., which created standalone platforms for the Chevrolet Volt and Nissan Leaf. Lackluster sales prompted GM to idle Volt production for a time this year.
"They over-reached," Tetreault said of his competitors. "When you're integrated the way we are, it doesn't matter."
Under its "One Manufacturing" strategy, Ford is working to build more flexibility at its plants worldwide. Within three years, Ford expects each of its assembly plants to make an average of 4.5 models by 2015, up from 3.6 currently.
Over time, Ford aims to equip more of its plants to handle multiple vehicle platforms. This is easier to do at plants that build cars, sedans and crossovers, because trucks have different design and build requirements, Tetreault said.
Ford's plant in Oakville, Ontario, can handle three body styles on two platforms and in Louisville, Ky., Ford can build six styles on three platforms. Ford is working to make other plants capable of building multiple platforms, but changing fuel economy and safety requirements are a challenge.
"The objective to make (platforms) stronger, lighter, is always out there," Tetreault said. "The real challenge is trying to meld all of that together into a cohesive strategy. The goal posts keep moving."
Bloomberg and Reuters contributed to this report.
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