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Ford gets a deal on Mustang's move to Flat Rock

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#1 ·
Granholm: Workers will repay tax breaks

February 11, 2003
BY JAMIE BUTTERS
DETROIT FREE PRESS BUSINESS WRITER

With $125 million in taxpayer support, Ford Motor Co. will move production of its Mustang muscle car from the Dearborn Assembly Plant, where Henry Ford once built model A's, to the Flat Rock plant it owns with Mazda Motor Corp.

Even though the state is staring down a $1.7-billion budget shortfall, Gov. Jennifer Granholm said the tax breaks will pay for themselves while helping to create up to 1,400 jobs in southeast Michigan for laid-off UAW members.

Flat Rock will begin building a redesigned 2005 Mustang in summer 2004.

"Michigan is still the No. 1 producer of passenger cars, and we're going to keep it that way," she said Monday.

Granholm said the state's $94.9-million business-tax credit and Flat Rock's $31-million tax break would be repaid with $850 million that would come from the additional taxes paid by the plant's 1,945 current workers, the 1,400 more who would be added and the 6,300 jobs that would be indirectly created by the spending of Ford and its employees.

At $90,000 per job created, the package is typical of what Michigan and other states have offered automakers to build or update plants.

General Motors Corp., for example, received $169 million in incentives to build a Cadillac plant in Lansing, or an average of $112,000 per job it is to create. At Ford's Rouge manufacturing complex, tax breaks totaled $234 million to preserve -- not create -- about 6,000 jobs. That works out to less than $40,000 per job, spread over 20 years.

On Monday, in her first auto-plant ceremony since becoming governor last month, Granholm seemed to enjoy herself. As Wilson Pickett's "Mustang Sally" played, Granholm danced to the stage and joked with Ford's North American President Jim Padilla that a Mustang would make a nice birthday present.

While widely expected, the news comes at a time when other one-shift plants are being closed for lack of use.

Ford is trying to shut three assembly plants and eliminate 21,500 jobs in North America after losing $6.4 billion in 2001 and 2002.

But it is also investing $8 billion in plants and equipment this year. About half of that -- $4 billion -- would be spent in North America, Padilla said. The Mustang investment totals $644 million.

For almost 39 years, Mustangs have been made at the historic Dearborn Assembly Plant, which will be torn down as part of the $2-billion Rouge Center redevelopment. The new truck plant there will begin making F150 full-size pickups in mid-2004.

Ford considered building the Mustang at two or three other sites, including at least one outside Michigan, said Roman Krygier, the automaker's group vice president for manufacturing.

The plant in Flat Rock, a Downriver community, belongs to Auto Alliance Inc., a joint venture between Ford and Mazda. Ford controls the Japanese car company.

The plant was nearly home to the Mustang 15 years earlier. In the late 1980s, when the Flat Rock plant belonged to Mazda, Ford planned to redesign the Mustang as a front-wheel-drive coupe and assemble it on the Mazda line.

Mustang fans complained that their icon was being defiled, and Ford called the Flat Rock model the Probe.

"It worked out for the best for everyone," said plant President Ron Muir, who has been at the plant since it opened in 1986.

(Photo)JEFF KOWALSKY/Bloomberg
Jennifer Granholm drives Ford North American President Jim Padilla around at the auto-plant ceremony in Flat Rock on Monday. Mustangs will be made there in 2004.
 

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#2 ·
Ford to Build New Mustang in Michigan
February 10, 2003
Motor Trend/(C) 2003 by United Press International

Gov. Jennifer Granholm drove a red convertible 2005 Mustang concept onto the floor of AutoAlliance International plant Monday as Ford announced production of the all-new pony car would create 1,400 jobs at the plant jointly owned by Ford and Mazda.

"I'm proud that our state provided the right business environment to convince Ford to keep Mustang production in Michigan and create 1,400 jobs," said Granholm, who was accompanied by Jim Padilla, president of Ford North America.

"We estimate those job will ultimately generate employment for another 6,300 residents within our state indirectly."

About 1,900 hourly and salaried workers are employed at the AutoAlliance plant, which was built in 1998 to assemble the Ford Probe, Mazda MX-6 and Mazda 626.

Ford and Mazda invested more than $644 million in new flexible manufacturing equipment, including a second line for the 2005 Mustang. Mustang production is expected to add a second shift to the plant when the Mustang reaches showrooms in fall 2004, company officials said.

The plant also assembles the all-new Mazda6 sedan, successor to the slow-selling 626. Ford said state-of-the-art, flexible production systems being installed in four plants would save the automaker up to $2 billion in operating costs over the next decade.

The redesigned Mustang is the latest version of the affordable American icon, introduced in April 1964. The Mustang had been built in the Dearborn Assembly Plant where Henry Ford produced the Model A in 1917.

The Dearborn Assembly Plant is being razed to make way for a new truck plant as part of the Ford Rouge Center redevelopment.
 
#3 ·
Flat Rock plant's future brighter with Mustang

Pony car brings job security, workers say

By Mark Truby / The Detroit News
Jerry S. Mendoza

DEARBORN -- For Tom Danowski, a veteran skilled tradesman at AutoAlliance International in Flat Rock, building Ford Mustangs is a dream job.

Danowski was among hundreds of workers cheering Monday as Ford Motor Co. announced that AutoAlliance, jointly owned by Ford and Mazda Motor Corp., will start producing a redesigned version of the car late next year.

"It really is a dream come true," said Danowski, whose first car was a 1967 Mustang 2+2 Fastback. "It's going to be a beautiful car and its going to sell."

The Mustang, which has sold well for nearly four decades, will bring job security to more Ford workers who until recently have had an uncertain future.

AutoAlliance has been one of the most underused auto factories in the United States since it opened in 1987. AAI has built the Mazda 626 and MX-6, Ford Probe and Mercury Cougar. None of the vehicles was considered a major success. AAI's owners killed the Ford Probe and MX-6 in 1997. Production of the Cougar and 626 ended in August.

Operating in recent years at less than a third of its capacity, the plant was considered a candidate for closure.

With the Mustang, along with the Mazda6 sedan currently coming off the production line, AAI is expected to be running full tilt by late next year.

"For the first time we have a product lineup for this facility that should do a pretty good job of filling it up," said Jim Padilla, Ford executive vice president and head of North America operations.

Ford sold 140,000 Mustangs last year and expects to sell at least that many in the future, Padilla said. Concept versions of the 2005 Mustang garnered positive reviews last month at the North America International Auto Show in Detroit.

Mazda hopes to sell about 90,000 Mazda6 sedans a year. AAI will also produce a hatchback and station wagon version of the Mazda6.

Mary Olson, chairwoman of UAW Local 3000, which represents workers at AAI, said she expects production on those vehicles to begin in February 2004.

"These products will help us ensure the long-term future of AAI," Olson said.

Today, 1,900 workers, including 300 salaried employees, toil along 13 miles of assembly stations. Ford plans to add another 1,400 workers and a second shift to begin production of the Mustang in the latter part of next year.

The jobs will be primarily filled by Ford workers who have been laid off.

While the Mustang and Mazda6 will run on separate lines in the body shop, they will be produced on the same trim, chassis and final lines.

"We will have the ability to change the mix, volume and options of products, all with minimal investment and changeover loss," said Phil Spender, AAI president.

Since its introduction in April 1964, the Mustang has been built at Ford's Dearborn assembly plant, where Henry Ford produced the Model A and developed the Rouge complex.

Constructed in 1917, the Dearborn factory will be torn down as part of the Ford Rouge Center redevelopment to make way for the new Dearborn truck plant, which is scheduled to begin production of the all-new Ford F-150 in mid-2004.

Mustang was introduced April 17, 1964, at the New York World's Fair. Although Ford only expected to sell 100,000 Mustangs the first year, dealers took 22,000 orders the first day. Mustang went on to sell 418,812 vehicles in its first year.

With the Mustang, and the Mazda6 sedan now coming off the line, AutoAlliance International is expected to be running at full tilt late next year.

AutoAlliance
Ford and Mazda are investing $644 million to retool their AutoAlliance joint venture factory. About the plant:
Location: Flat Rock
Employees: 1,623 hourly, 302 salary; up to 1,400 new jobs will be added to build 2005 Ford Mustang starting in second half of 2004.
Current Product: 2003 Mazda6 sedan
Year opened: 1987
Plant size: 2.7 million square feet
2002 output: 65,924 units, down from 71,723 in 2002
Ownership: Ford controls 50 percent, Mazda owns 50 percent
Sources: Ford, Ward's Automotive Reports

(Photo)Gov. Jennifer Granholm drives the Mustang GT concept convertible at the AutoAlliance International plant in Flat Rock with Ford Executive Vice President James Padilla at her side. Mustang output will start in fall 2004.
 

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#4 ·
Mustang move adds 1,400 jobs

By Mark Truby / The Detroit News

FLAT ROCK -- The Ford Mustang is leaving its home of 39 years at a Dearborn assembly plant, but the popular pony car is staying in southeast Michigan and adding 1,400 jobs.

In a raucous news conference Monday, Ford Motor Co. said the redesigned 2005 Mustang will be built at AutoAlliance International in Flat Rock, a 50-50 joint venture between Ford and Mazda Motor Corp.

The automaker is investing $644 million in the plant -- which also builds the Mazda6 sedan -- and adding up to 1,400 workers to build the new Mustang beginning late next year. Most of the jobs will be filled by laid-off Ford employees.

The Michigan Economic Development Corp. estimated Mustang production will net the state $758 million in taxes and generate $10 billion in personal income over the next 20 years.
 
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