A factory in flux

DETROIT — After nearly 20 years working on the line at Ford Motor Co.’s Michigan Assembly Plant, Bob Wieck is used to change.

The 39-year-old started at the site in 1999, and during his career — which included a brief stint at the Dearborn Truck Plant — he has switched from building cars to trucks to cars and, next year, back to trucks.

Wieck had been making Ford’s unibody Focus sedan at the Wayne Stamping and Assembly Plant when, in 2009, the automaker decided to close it, consolidate production at neighboring Michigan Truck and rename the site Michigan Assembly. The state-of-the-art factory would build gasoline, electric and hybrid small cars after a $550 million renovation using a government loan. Wieck was moved to Dearborn Truck for about a year during the conversion, but returned to renovated Michigan Assembly in 2011.

He said initially workers were worried and confused over the closure and transition, but were ultimately excited that Ford dedicated major resources to adding C-Max hybrids and increasing Focus output.

“That was huge,” he said. “We knew we had at least another 10 years.”

Not quite. 

Less than a decade later — after production cuts and layoffs — Ford is abandoning that investment, sinking about $850 million into Michigan Assembly to convert it back to a body-on-frame truck and SUV plant, this time for the Ranger midsize pickup and Bronco SUV.

Although Michigan Assembly is Ford’s second-biggest plant in the United States and contributes billions to the state’s economy, the automaker can’t seem to settle on a role for the plant. Twice in about seven years, Ford has significantly changed its product plan for the site — a process that has cost billions in construction, new machinery and worker retraining.

“In many respects, the whole site there is really a sign of the times of what has happened the last 10-plus years in the industry,” Joe Hinrichs, Ford’s president of global operations, said in an interview. “It’s a reminder of what changes.”

Stalling workflow for weeks at a time to gut the interior of a plant is inefficient, especially for a company whose founder preached the benefits of interchangeable parts to achieve maximum productivity.

But analysts say such costly decisions are neither uncommon nor avoid-able.

Consumer preferences have changed drastically since the turn of the century: Buyers who once scooped up gas-guzzling utility vehicles traded them in for economically sensible sedans as gasoline prices spiked, only to return to larger vehicles as the economy rebounded and oil prices fell.

Automakers, meanwhile, are forced to respond to the whims of the buying public with product plans that are often set four or five years in advance. For instance, Fiat Chrysler is preparing to convert its Toledo North Assembly plant in Ohio from making unibody Jeep Cherokees to body-on-frame Wranglers.

“They have to react to what the future market conditions are expected to be,” Kristin Dziczek, director of the industry, labor and economics group at the Center for Automotive Research in Ann Arbor, Mich., said in an interview. “Any time you’re trying to hit a mark several years into the future, it’s hard to know.”

Michigan Assembly was successful, at least early on, with the small cars.

According to a 2013 study by CAR, the site at the time supported more than 48,000 jobs nationally, including 24,000 in Michigan. The plant’s annual contribution to the gross domestic product then was $3 billion in Michigan and more than $5.7 billion nationally.

Ford built more than 850,000 vehicles during the first three full years of production, according to the Automotive News Data Center. But output has fallen every year since 2013, and the same factors that prompted its creation ultimately became the plant’s undoing.

“At that time, gas prices had been relatively high, so demand for small cars was there,” Dziczek said. “Now it’s not.”

Slumping sales led to extended downtime at the plant, making for an awkward encounter in January 2015 when President Barack Obama came to the site to hold a rally touting the resurgent American auto industry. Because the assembly lines were temporarily shut down and workers had been sent home, Ford had to rely on employees coming in on their day off to form a crowd.

Months after the president’s visit, Ford decided to lay off about 700 workers, eliminating a third shift that it had added a few years earlier.

In 2015, Ford announced it would move the Focus out of Michigan Assembly to a low-cost location in 2018, but that no jobs would be lost because it would replace production with two yet-unnamed vehicles, which turned out to be the Ranger and Bronco.

Ford later said it would move Focus production to China, and has yet to announce plans for the C-Max, which many expect will be killed. The about-face signaled the end of the government-funded renovation after just seven years.

“Was it a bad investment? From the government’s perspective, it was a loan that’s being paid back,” 
Dziczek said “I think it secured a future for the plant so it could live on to get this new investment now.”

A Ford spokeswoman said that the automaker has paid back $3 billion of the $5.9 billion federal loan, and is on track to complete repayment in 2022.

The last Focus and C-Max are to roll off the line at Michigan Assembly in mid-2018.

Ford has said it expects a four-week changeover, a process that it has perfected thanks to its 2014 overhaul of the Dearborn Truck Plant to convert to aluminum-bodied pickup production.

Wieck said workers were told the changeover will last one to two months and that the company will keep some existing machinery. While workers likely will have to undergo another round of training to build the different vehicles, he doesn’t expect dramatic change.

“Working on the line is just a part of the puzzle,” he said. “There will probably be little adjustments, but I don’t think it will be huge.”

Wieck is excited about the massive transformation about to occur. He said despite the change, the plant’s future is likely more secure than before because it will be building vehicles that are more in demand.

Ford officials echo his optimism. Although car production didn’t last long, Hinrichs believes the past seven years have been beneficial to Ford’s understanding of hybrid and electric vehicle development.

“If you look at it over a long time period, we went from body-on-frame to unibody back to body-on-frame,” Hinrichs said. “That’s not ideal, but at the same time I think we’re ending up at a really good place: Focus production moving to a low-cost location, which has been needed for a long time, and two very important nameplates being brought to the showroom I know our dealers and a lot of customers are excited about.”