Ford to build new Escape in Kentucky, adding 1,800 jobs

Ford Motor Co. is investing $600 million to renovate its Louisville, Ky., assembly plant to build the next-generation Escape for North America. Some 1,800 jobs will be added when the plant reopens in late 2011, Ford announced today.

The automaker said the factory is the third North American body-on-frame truck plant it is retrofitting to build more fuel-efficient vehicles.

The refurbished plant will be flexible enough to produce five additional models -- cars, crossovers and wagons -- and will become Ford's most advanced factory in the world, the automaker said. Bloomberg News reported the plant will also produce a small crossover for Lincoln starting in 2012. Analysts say Ford will also be able to produce the new Focus compact car at the factory, if needed. The redesigned Focus will be assembled at Ford's Wayne, Mich., assembly plant.

The Louisville plant has built the Ford Explorer SUV since 1990. Ford plans to end output of the 2010 Explorer SUV on Dec. 16.

Two shifts

Ford has shifted production of the all-new 2011 Explorer to its Chicago assembly plant. The Escape and Escape Hybrid are currently built in Kansas City, Mo.

Ford's Kansas City plant will continue to build the Ford F-150 pickup on one shift. Missouri lawmakers have offered Ford incentives to bring a new model to Kansas City and keep the plant open.

Production of the Mercury Mariner and Mariner Hybrid -- a sibling of the Escape -- is scheduled to end this week at the Kansas City plant as part of Ford's plan to discontinue the Mercury brand.

“Additional new products for Kansas City will be announced at a future time,” Ford spokesperson Marcey Evans told Bloomberg.

When the Louisville factory reopens in 2011, Ford said it will operate on two production shifts with about 2,900 employees -- up from one shift currently and about 1,100 employees.

Ford said the 1,800 additional jobs are expected to be filled through a combination of employee transfers from other facilities, reactivated workers on indefinite layoff at the time of launch, and new workers. Under the automaker's labor agreement with the UAW, new production workers will be paid substantially less than existing workers.

“Working closely with the UAW and Kentucky officials, we have found a way to competitively deliver an important new vehicle that is good for our customers and supports our plan to deliver a well-balanced product portfolio of cars, trucks and utilities,” Mark Fields, Ford's president of The Americas, said in a statement.

Preview in Detroit

Ford said today it plans to offer a preview of the new Escape with a concept scheduled to be unveiled at the Detroit auto show in January.

The changes to the Louisville plant will include tooling and facility upgrades in the final assembly area and body shop.

New, reprogrammable tooling in the body shop will allow the plant to produce multiple vehicle models at the same time without requiring downtime for tooling changeover -- making the plant Ford's most flexible high-volume factory in the world.

“Manufacturing flexibility is a key to competitiveness, and we are continually exploring ways to raise the bar in this critical area of the business,” Jim Tetreault, Ford's vice president of North America manufacturing, said in the statement.

“While we are launching Louisville Assembly Plant with one key product -- the next-generation Ford Escape -- we are building in the flexibility to produce other vehicles at the plant in the future, depending upon volume requirements, customer preferences and other factors that affect vehicle demand.”

Tax breaks

As part of the project, the state of Kentucky and the city of Louisville agreed to award Ford up to $240 million in tax incentives during the next 10 years. The incentives are based on current and potential future investments and job creation at the company's two Kentucky facilities -- the Louisville assembly plant and Ford's Kentucky truck plant, where the Super Duty F-Series pickup is built.

Kentucky's incentives are based upon an initial combined Ford investment at both facilities of about $800 million. The project is also supported by loans from the U.S. Department of Energy.

The Louisville assembly plant is one of 11 Ford facilities in the United States participating in the Advanced Technology Vehicles Manufacturing Incentives Program launched by Congress and implemented by the Obama administration. Under the program, Ford has been awarded $5.9 billion in loans to refit plants to build more fuel efficient and advanced technology models.