Image: Ford Factories
Carlos Osorio  /  AP
Ford will convert the Michigan Truck plant in Wayne from its current products, the giant Lincoln Navigator and Ford Expedition SUVs, to small cars in 2010. It's part of Ford's effort to shift three factories from trucks to cars to match consumer demand.
updated 8/26/2008 6:52:13 PM ET 2008-08-26T22:52:13

Demand for Ford Motor Co.'s Focus and other small cars has been superheated ever since gas prices headed toward $4 per gallon in May, and since then, Ford hasn't been able to build the Focus quickly enough.

On Tuesday, though, the automaker took two steps toward further cranking up Focus production, announcing that it would sink $75 million into the body-making part of an SUV factory next door to the Wayne Assembly Plant, where the Focus is built.

If demand stays strong, the SUV plant will quickly start producing Focus bodies, eliminating what is now a bottleneck that is slowing production.

The struggling automaker also is sending the SUV factory's 1,000 workers to the Focus plant in January to add a third crew to production lines, also helping to boost production.

In July, Ford announced plans to convert the Michigan Truck plant in Wayne from its current products, the giant Lincoln Navigator and Ford Expedition SUVs, to small cars in 2010. It's part of Ford's effort to shift three factories from trucks to cars to match consumer demand, which has rapidly moved away from trucks and SUVs with gas prices around $4 per gallon.

Due to sagging demand for SUVs, Ford temporarily closed Michigan Truck for 10 weeks during the summer, but it's scheduled to resume production next week. It will build trucks into November, when Ford will start pulling out part of the machinery and moving it to the Kentucky Truck Plant in Louisville, which will build the big SUVs starting in the second quarter next year. The plant in Louisville will continue to build F-series Super Duty pickups as well.

Because of a $300 million investment in a new flexible body shop made in 2005, Michigan Truck can be converted, at relatively small expense, to make small-car bodies, Bill Russo, Ford's director of manufacturing operations, said during a plant tour on Tuesday.

About 80 percent of the machinery that assembles bodies will stay at Michigan Truck and be converted to build small cars, Russo said. Robots at the plant merely have to be reprogrammed, he said. The rest of Michigan Truck can be converted almost as easily, although Ford would not say how much it will spend to change the whole plant.

Once the body shop tooling is sent to Kentucky, Michigan Truck can be refitted to make small car bodies in six to eight weeks, said Russo.

But consumer demand will ultimately decide if it will be needed for that purpose or if it will remain idled until it starts building cars on Ford's global Focus underpinnings in 2010, Russo said.

By moving the 1,000 workers to the Focus plant, Ford will be able to build more than 300,000 Focuses per year, which may satisfy demand, Russo said.

Through July, Ford sold more than 138,000 Focuses, up 26 percent over the same period last year, and the company said it could have sold more if it could build them faster.

"It's all going to depend on where is the overall market, and then specifically, where is the C (compact car) segment of the market," Russo said.

When fully retooled, Michigan Truck will be renamed and will be able to build up to four different body styles, or "tophats," on two different sets of underpinnings, Russo said.

Ford plans to eventually make all of its factories that flexible, following the same steps and procedures to build cars worldwide, Ford executives have said.

Once retooled, Michigan Truck will be comparable to the flexible plants run by Honda Motor Co., said Greg Gardner, an analyst for the consulting firm Oliver Wyman, which publishes the annual Harbour Report on auto manufacturing productivity.

"In East Liberty, Ohio, Honda is able to build the Civic, the CR-V and the Element," Gardner said. "If Ford can do three or four of what they call tophats, that will be, in concept, comparable to what Honda can do today."

If Michigan Truck begins making Focus bodies, it wouldn't need to add any workers, the company said.

Michigan Truck is one of three North American truck and SUV plants that Ford said it plans to retool to make compact and subcompact vehicles.

Ford also announced in July that it would retool its Louisville Assembly plant, which makes Ford Explorer SUVs, to make small cars in 2011. The company previously announced it would convert its Cuautitlan Assembly Plant in Mexico, which makes pickup trucks, to produce the Fiesta subcompact in 2010.

Ford shares fell 6 cents to $4.35 in trading Tuesday. They have traded in a 52-week range of $4.25 to $9.24.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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