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Ford Louisville plant enters 2023 UAW talks without a plan – Automotive News

by Nov 8, 2022Blog0 comments

On a stage below the twin spires of Churchill Downs racetrack, Ford Motor Co. CEO Jim Farley choked up while addressing hundreds of local factory workers for the reveal of the automaker’s redesigned heavy-duty pickup line.
“Kentucky matters,” he said Sept. 27. “All of you matter. And the Super Duty matters.”
The next 12 months could prove the sincerity of Farley’s emotional statement.
There’s no doubt the Bluegrass State is key to Ford’s future. The automaker is investing $700 million in its Kentucky Truck Plant to build the next-generation Super Duty, which is among its most profitable vehicles. And it’s spending $5.8 billion with a partner on two new battery plants in central Kentucky that are slated to open mid-decade.
(3 Results)
Approximate employees: 4,100
Products: Ford Escape, Lincoln Corsair
Year opened: 1955
Approximate employees: 8,920
Products: F-250-F-550 Super Duty, Ford Expedition, Lincoln Navigator
Year opened: 1969
Projected employees: 5,000
Products: EV batteries
Scheduled to open: 2025
But what’s less clear is how much Ford’s other assembly plant in the state matters to the company.
Louisville Assembly, about a half-hour drive southwest of Kentucky Truck, produces the Ford Escape — the automaker’s third-bestselling nameplate — and the Lincoln Corsair, the luxury brand’s top seller. But its future is in doubt.
Although Ford has unveiled midcycle updates for both vehicles, Automotive News reported in August that the company has no plans for a new generation of either compact crossover. Nothing is slated to replace them, according to people familiar with Ford’s plans, leaving the plant without a product plan heading into contract negotiations next year with the UAW.
“It’s 100 percent on our radar,” Todd Dunn, president of UAW Local 862, which represents Louisville Assembly and Kentucky Truck, told Automotive News. “Is there concern about product? Absolutely. It’s always on members’ minds as far as reinvesting in Louisville and continuing on. We want to make sure every North American assembly plant has production across the board.”
Farley himself has hinted the Escape may not be long for North America.
“We’re going to have passion brands,” he said this year of the company’s gasoline-focused Ford Blue division. “We’re not going to have commodity products like Edges and Escapes.”
Dunn said he’s received “zero communication” from Ford about the future of the Escape.
“There’s conversation about flexibility and the ability to build any product, but there hasn’t been anything specific,” he said.
Ford spokeswoman Kelli Felker, in an emailed statement, declined to say whether Ford had plans for the plant’s future but noted that workers will soon begin producing the freshened crossovers.
“Louisville Assembly Plant and our employees there are an important part of Ford’s manufacturing operations,” the statement said.
The assembly plant, opened in 1955, is Ford’s third-oldest in the U.S., according to company records. It has produced the Explorer, Bronco II, Ranger and a number of other vehicles.
It currently employs about 4,100 people, including about 3,900 hourly workers.
During the last union contract talks, in 2019, just after Ford redesigned the Escape and Corsair, the automaker pledged to invest $100 million in the plant through 2023. Ford has met that commitment, Felker said.
The union is expecting additional investment during the next round of talks.
“Louisville Assembly is a key focus in the upcoming negotiations in regard to securing product and investment,” UAW Vice President Chuck Browning, who leads the Ford department, said in an emailed statement.
Automakers often use manufacturing facilities as bargaining chips in contract talks.
Ahead of the 2019 negotiations, General Motors threatened to close five North America plants before ultimately keeping two of the five open.
Louisville Assembly won’t be the only plant at the center of next year’s talks. The futures of GM’s Chevrolet Malibu plant in Kansas City, Kan., and Stellantis’ Jeep Cherokee plant in Belvidere, Ill., also are up in the air.
“What we’re going to see over the next decade is automakers make a transition from internal combustion to battery-electric vehicles. It’s going to mean a major shake-up in the manufacturing footprint,” Stephanie Brinley, associate director of research and analysis at S&P Global, said in an interview. “It could feel uncertain for a while as automakers figure out how their manufacturing footprint is going to make that transition, exactly what the timing is and exactly what product goes where.”
In Ford’s case, there likely will be product available to be claimed.
The automaker has said electric vehicles will account for 40 percent of its global sales by 2030 and has teased a new battery architecture that could underpin a wide range of second-generation EVs.
“Louisville seems to be ripe for negotiating future product,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions.
Forecasters say the case for closing the plant is thin.
Ford hasn’t shuttered a North American assembly plant since Twin Cities Assembly in St. Paul, Minn., closed in 2011. It was a delayed casualty of Ford’s Way Forward restructuring plan that was unveiled in 2006 to cut costs.
While Farley is reorganizing the company under a new plan called Ford+, the company is solidly profitable and far from the dire situation it faced going into the Great Recession.
Although Escape and Corsair sales have fallen in recent years, both are high-volume crossovers that compete in large segments. Should Ford phase them out, it could still renovate the plant for a different product.
“No one’s going to be giving up volume,” Brinley said. “The units that plant has capacity for have to be used somewhere.”
But Fiorani said potential closure can’t be completely ruled out, especially when Ford is readying a new assembly plant in Tennessee as part of a $5.6 billion manufacturing complex.
“When you add capacity, it always puts an older plant at risk,” Fiorani said. “Louisville is a large plant, and it has an established work force. But on the negative side, it’s approaching its 70th birthday.”
Dunn said the workers he represents at Louisville Assembly would be open to building any type of vehicle, including EVs, should Ford choose to retool it.
“We just want to make sure we’re building Ford Motor Co. products,” Dunn said. “We want these jobs to be career jobs. Whatever it is, we want to remain open and viable.”
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