Ford to invest $168 million to shift pickup output from Mexico to Ohio plant

Article by Christian Andrei, on March 8, 2014

Ford Motor Co. plans to revive its Avon Lake site in Ohio where it is building the to-be-discontinued Econoline van by making a $168-million investment to shift pickup production there from Mexico early next year. The carmaker is planning to shift production of the F-650 and F-750 medium-duty pickups from its Escobedo site in Mexico, the company said in a statement.

Ford had operated a Mexic0-based joint-venture with Navistar International Corp. -- Blue Diamond Trucking Co. – but is terminating the partnership to fully control of production, design and engineering of its F-series pickups, Joe Hinrichs, Ford’s president of the Americas, told Bloomberg in an interview. The F-series truck line account for most of the carmaker’s, Morgan Stanley has said.

Ford sold 763,402 F-series trucks in 2013, including 8,682 medium- and heavy-duty pickups, reflecting an 18-percent jump from 2012. Ford will roll out later this year an aluminum-bodied F-150 pickup, and redesigned versions of the F-650 and F-750 in early in 2015. “This is a highly profitable vehicle,”said Kristin Dziczek, an analyst with the Center for Automotive Research.

“The bigger the vehicle, the higher the profit, so that makes it less difficult that the labor costs are slightly higher in Ohio than Mexico.” Dziczek noted that Ford now won’t have to share profits with Navistar after its withdrawal from the joint-venture. “It’s so critical to be able to offer our commercial customers everything from an F-150 all the way to an F-750 and to know it’s built by Ford," Hinrichs said.

Topics: ford, investment

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