Ford, the nation’s second largest automaker after General Motors, said Thursday it would spend $200 million to renovate its Cleveland engine plant to produce small, turbocharged engines for use in its top-selling models.
The move is the latest by automakers to expand production in the United States, where sales have increased 14 percent so far this year compared with 2012.
Last month, G.M. announced plans to invest $600 million in its assembly plant near Kansas City, Kan., one of the company’s oldest factories. And Chrysler, the smallest of the Detroit car companies, is adding a third shift to its Jeep plant in Detroit.
The expansions are another tangible sign of the steady recovery in the American auto market, which fell to historic lows during the recession.
Both G.M. and Chrysler were forced to declare bankruptcy in 2009 in exchange for big government bailouts. While Ford survived the industry’s financial crisis without help, it still cut thousands of jobs and shuttered several factories to reduce costs and bring production more in line with shrinking sales.
But the tide has turned in car showrooms across the United States, prompting automakers to strategically increase output in their remaining plants.
In Ford’s case, the company added about 8,000 salaried and hourly jobs last year, and has said it plans to hire about 2,200 white-collar workers in 2013. Ford is also moving some vehicle production from Mexico to a Michigan plant, where it will add 1,200 jobs.
The investment in Cleveland is indicative of how Ford and other carmakers have trimmed labor costs in the United States and improved productivity since the recession.
Just a few years ago, the company was forced to consolidate two engine plants into one in northern Ohio and to close a major component operation.
“No question we have been through a lot in northern Ohio,” said Joe Hinrichs, the head of Ford’s Americas region, in an interview. “But now our North American business is very competitive with the best in the world.”
Ford plans to centralize production of its 2-liter, EcoBoost engine — used in popular models such as the Fusion sedan and Explorer S.U.V. — at the Cleveland facility by the end of next year. Currently, the company makes the engines at a plant in Spain and ships them to America.
While Ford is adding jobs and production domestically, it is racing to reduce costs in its troubled European division. Workers who previously built the small engines in Spain will be moved to a nearby assembly plant that is taking on work from a plant to be closed in Belgium.
Mr. Hinrichs said that a new agreement with the United Automobile Workers union local in Cleveland paved the way for the expansion there. The plant now employs about 1,300 workers.
“This is about servicing more demand in the U.S.,” Mr. Hinrichs said. “And with our competitive labor agreements, we can bring business to the U.S. from Spain and Mexico.”
Article source: http://www.nytimes.com/2013/02/22/business/ford-expanding-ohio-engine-plant.html?partner=rss&emc=rss