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Ford is investing $1 billion in Chicago plants making its high-profit SUV The automaker is hiring 500 workers to expand its ability to crank out vehicles including its new Explorer, an investment announced at the Chicago Auto Show today.

Crain's Chicago Business

Thursday, February 7, 2019  |  Column  |  Bloomberg

Employment, Jobs (40)

Ford Motor Co. is investing $1 billion in two Chicago factories and hiring 500 full-time workers to expand its ability to crank out high-profit sport-utility vehicles, including its new Explorer.

 

Chicago Mayor Rahm Emanuel and Joe Hinrichs, Ford’s president of global operations, made the announcement today at the Chicago Auto Show. The investment in the assembly and stamping plants fulfills an obligation the company made in its 2015 contract with the United Auto Workers. Ford is set to bargain a new pact with the UAW later this year.

When Ford finishes hiring for these jobs, there will be 5,800 workers divided between its Torrence Avenue and Chicago Heights plants, according to a statement from the automaker. Hiring began in December, and the plants’ transformation will begin in March, expanding the plants’ production capacity.

 

“Adding 500 jobs to a plant that’s already running around the clock is exciting,” Hinrichs said.

 

Ford is killing off its slow-selling sedan business in the U.S. and betting big on the SUVs and trucks that generate most of its profit. Other American manufacturers also are closing plants and cutting shifts at auto factories as consumers, driven by cheap gas and a love of the large, are shunning traditional cars. Ford CEO Jim Hackett is trying to capitalize on this trend as he engineers an $11 billion overhaul.

 

Ed Kim, vice president for industry analysis at AutoPacific, an auto industry research firm in suburban Los Angeles, said “the investment being made in the plants reflects that the level of sophistication in the vehicles being built there is going up.”

 

The Ford Explorer has to excel at everything it does because it is one of Ford’s “strategically most important vehicles,” Kim said. This investment will keep the plants, which are decades old, competitive with other operations inside and outside Ford.

 

“We’re playing to our strengths.” Kumar Galhotra, head of Ford’s North American operations, told reporters in Detroit last week. “That means we’re allocating our capital differently. Ninety percent of our capital is now going into trucks and utilities.”

 

Ford’s 95-year-old Chicago assembly plant and 63-year-old stamping plant—which also will build the Lincoln Aviator and Police Interceptor Utility—is being updated with advanced manufacturing technology, and the 5,800 workers will be trained with new skills, the automaker said in a statement.

 

The assembly plant produced the Model T in 1924 and was converted to war production in the 1940s.

Ford is adding a new body shop and paint shop at Torrence Avenue, the statement said, plus making “major modifications in the final assembly area.” New stamping lines will be added at the Chicago Heights facility. The upgrade will add a collaborative robot and 3-D printing tools.

 

Ford also is spending $40 million to upgrade lighting and add security at the plants, which have a history of sexual and racial harassment. In August 2017, the company agreed to pay as much as $10.1 million to settle claims following an investigation by the Equal Employment Opportunity Commission. The Dearborn, Mich.-based company faced similar charges at the factories that led to a $17.5 million settlement in 1999.

 

Given the thousands of employees in the Torrence Avenue plant, “we’ve got to continue to monitor, continue to educate,” Hinrich said.

 

Ford also will improve bathrooms and cafeterias and add new break areas at the aged facilities.

 

Hackett wrote an open letter apologizing to employees in December 2017 after the New York Times published a report about the long history of sexual and racial complaints at the two factories.

 

“There is absolutely no room for harassment at Ford Motor Company,” Hackett wrote, adding for perpetrators: “We don’t want you here, and we will move you out for engaging in any behavior like this.”