Ford Continues U.S. Plant Closures and Mexican Expansions in the Face of Gloomy September Sales

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Researched by Industrial Info Resources (Sugar Land, Texas)--On October 1, Ford Motor Corporation (NYSE:F) (Dearborn, Michigan) reported its September sales figures, which represented the lowest month of sales this year. Sales of Ford, Lincoln and Mercury vehicles for September were 116,734, down 34% from September 2007. Year-to-date figures show a drop of 17.3% in sales from the same period last year.

Ford's Senior U.S. Economist, Emily Kolinski Morris, participated in a conference call regarding the sales. "Clearly, we are looking at a very fragile economy," she said. "The freezing up of short-term credit markets in recent weeks has become more severe than other recent episodes. Policy measures to restore market liquidity will be critical to stabilize the financial sector and to preserve the functioning of the economy in the coming months. While policy makers are working aggressively to address the situation, we cannot yet see the path to its resolution."

Despite the low sales and uncertain outlook for the future, Jim Farley, Vice President for Marketing and Communications, announced that the company would be launching 10 new vehicles in the next nine months. Farley also stated that Ford was planning an "assault on the small vehicle market in 2010."

Industrial Info is currently monitoring an estimated $3.53 billion of Ford's projects in North America, including two plant closures in the U.S. and two plant expansions in Mexico. Ford is scheduled to begin dismantlement of its 2.2 million-square-foot Cleveland Engine Casting plant (Cleveland, Ohio) in February of next year. Closure of the plant, which will involve environmental remediation in addition to the removal and dismantlement of equipment and production lines, will cost an estimated $18 million and is scheduled to be completed before the end of 2009. Another closure is occurring at Ford's Twin Cities Assembly plant in Saint Paul, Minnesota. Equipment and lines in the plant will be demolished or relocated. Closure of the former 160,000-unit-per-year plant is scheduled to be finished early next year.

Ford's activity in Mexico is quite different. The company is planning to construct an additional 300,000 square feet of production space at its engine assembly plant in Ciudad Jaurez, located just over the border from El Paso, Texas. Completion of the project is scheduled for summer 2009 and will cost an estimated $2.3 billion. Expansion of a stampings and assembly plant in Hermosillo, Mexico is scheduled to begin next year. Ford will install new tooling and assembly equipment in order to increase the plant's capacity at an estimated cost of $1 billion. For more information on these and major other projects in the U.S., Canada and Mexico, visit Industrial Info's North American Industrial Database.

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Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.