Ford’s Compact Car Production Leaving Michigan And The USA — Can You Guess Where Ford’s Going Instead?

Ford’s compact car production is moving from the Michigan Assembly Plant, which is currently located near Detroit. The Ford Focus and C-Max hybrid production will move from the Motor City area by 2018. Ford blames the move on the difficulty the company is having making fuel-efficient vehicles at home and still turning a profit. Ford’s announcement precedes the United Auto Workers talks about the union’s labor agreement. The UAW wants to fight proposals to scale back healthcare costs and seeks a wage increase. So, where is production headed?

Ford has assembly plants in Mexico already for the production of the Ford Fusion and the Fiesta. The Ford Focus and the Ford C-Max hybrid are likely headed south of the border as well.

Ford’s spokeswoman Kristina Adamski stressed that Ford hopes to produce different vehicles at the Michigan Assembly Plant sometime in the future.

“We actively are pursuing future vehicle alternatives to produce at Michigan Assembly and will discuss this issue with United Auto Workers leadership as part of the upcoming negotiations.”

Ford received federal support to continue making fuel-efficient vehicles within the United States. The Michigan Assembly Plant in Wayne was one of 13 factories owned by Ford that was supported in part by a nearly $6 billion loan from the U.S. Department of Energy in 2009.

Business Insider pointed out how difficult sales of the Focus and C-Max have been for the company.

“U.S. first-half sales were down 3 percent for the Focus and 17 percent for the C-Max.”

Thursday’s confirmation from Ford seems to indicate that the UAW will lose out to factory workers in Mexico. UAW members were handed bulletins, Local 900 Chairman Bill Johnson told The Detroit News, indicating that most likely production will not just be moved from Michigan, but from the U.S. entirely, favoring production south of the U.S. border.

This spring, Ford announced that it would create 3,800 jobs and invest $2.5 billion into Mexico for two plants that would produce engines and transmissions. Now, it appears as though even more jobs are headed to Mexico.

“I think Ford has a trump card in their hand as they walk into negotiations,” Dave Sullivan, manager of product analysis with AutoPacific Inc., told The Detroit News. “It sends a message that now the UAW has to negotiate for jobs and (Ford) can close a plant and move it to another, lower-cost facility.”

In mid-June, Ford laid off 673 hourly employees and 27 salaried employees. With relatively low gas prices compared to recent years, Americans just aren’t buying the fuel-efficient vehicles as expected, and there is not as much of a profit in these vehicles either. According to the Detroit News, besides for Michigan, the Focus is also “built in China, Argentina, Germany, Russia, Thailand, Vietnam, and Taiwan for overseas markets” and the C-Max is also built in Germany.

Meanwhile, General Motors announced that it will invest nearly $5.5 billion into U.S. plants over three years and create 650 new American jobs. Ford’s Wayne plant is the largest employer in the city, employing thousands from the cities and suburbs of the Motor City. If the Ford plant actually closes after moving the Focus and C-Max production out of Michigan, the city will suffer a hard setback in tax revenue and employment rates for the area are expected to plummet.

[Photo via Dwight Burdette]