Ford will pump out profitable big SUVs to fund its future
Automaker spending $25m more at Kentucky factory to build more of the big SUVs
Ford Motor Co. is spending $25 million (Dh91.82 million) more at its Kentucky factory to pump out more of the profitable big sport utility vehicles that are critical to funding its ambitious — and expensive — electric and self-driving vehicle plans.
The investment will allow the second-largest US automaker to boost production of the new Lincoln Navigator and Ford Expedition by 25 per cent from what the company was planning last fall, when the redesigned models first hit showrooms.
“The Expedition and Navigator products are very important to both the Ford and Lincoln line-ups,” Joe Hinrichs, Ford’s president of global operations, told reporters on a tour of the plant. “It’s really important that this plant is able to produce more because we know we have this high demand now.”
The factory — which also assembles Ford’s Super Duty pickups — is a money minter for the automaker, churning out models that analysts estimate can generate profits that exceed $10,000 (Dh36,730) a vehicle. Those earnings are essential for Ford as it plays catch-up to rivals such as General Motors Co. and Tesla Inc. in developing battery-powered cars and autonomous vehicles.
Incremental spending
The incremental spending is on top of the $900 million investment that Ford announced for the factory in June. Upgrades to the Kentucky Truck Plant in Louisville include 400 new robots, improved data analytics and a parts-making 3D printer.
Crosstown rival GM has dominated the large and luxurious SUV market with models including the Cadillac Escalade and GMC Yukon, giving the company a $2 billion pretax profit advantage over Ford, according to a 2016 analysis by Morgan Stanley.
Last year, Ford gave its big rigs complete makeovers for the first time since the George W. Bush administration to try to reclaim some of that lucrative market share. Early reviews have been positive and the Navigator nabbed the prize for North American Truck of the Year at the Detroit auto show last month.