Ford rolls out new era at oldest assembly plant
$400 million Chicago factory builds three crucial new models
By Eric Mayne / The Detroit News
2005 Ford Five Hundred
About Ford's Chicago plant
What: Renovated assembly factory, and nearby stamping plant and supplier park
Investment: $800 million by Ford and 12 auto parts suppliers
Employment: 5,600, including workers at nearby, 155-acre supplier park
Products: Ford Five Hundred, Ford Freestyle and Mercury Montego. A fourth product, a Mercury crossover, will be produced at a future date.
History: Opened in 1924 to build Model T. Later assembled the F-100 pickup, Galaxie 500, Thunderbird, Torino, LTD, and the Ford Taurus and Mercury Sable. Ford's oldest plant in the world.
Fun fact: Flexible body shop and final assembly area allows Ford to quickly change product mix build up to eight different models off two vehicle platforms.
Source: Ford Motor Co.
2005 Ford Freestyle
2005 Mercury Montego
CHICAGO — Ford Motor Co. is about to find out if a $400 million gamble to refurbish an old factory on Chicago’s south side will pay off in hot demand for the automaker’s next generation of passenger cars.
The shiny Ford Five Hundred sedans that rolled off the assembly line Tuesday to the cheers of workers represent the automaker’s best chance to win back ground lost to Japanese rivals.
The new flagship of Ford’s Blue Oval car lineup is one of a trio of new models to be built in Chicago that Ford is betting will put the company back on top of the American car market it once dominated with the stalwart Taurus.
Although Ford has been churning out Five Hundreds since mid-July, the company celebrated the vehicle’s launch Tuesday at the 80-year-old Chicago Assembly Plant — a former site of Taurus production and the oldest Ford factory in the world.
Ford executives joined local politicians and United Auto Workers officials to mark the complex, simultaneous introduction of the Five Hundred; its mechnical twin, the Mercury Montego; and the Ford Freestyle — a cross between a car, a minivan and a sport utility vehicle.
The launch is critical for Ford because it marks the automaker’s re-entry into a car market dominated by foreign competitors. Ford’s car sales are down 12.3 percent this year, while overall car sales are down 1.4 percent.
“If you think about Ford, people a lot of times think immediately about trucks,” said Greg Smith, Ford executive vice president and president of the Americas. “We are presenting some products that will be in the mainstream of the car business.”
The full-size Ford and Mercury sedans will start at $22,795 and $24,995, respectively, while Freestyle prices will begin at $25,595.
The trio features novel applications of proven technologies that are new for Ford’s North American car lineup — all-wheel drive and a pair of new fuel-saving transmissions.
The vehicles arrive at a juncture in Ford’s history when its midsize car offerings — such as Taurus and its Mercury twin, Sable — are tired relics compared with steady market performers such as the Toyota Camry and Honda Accord.
Critics have labeled the Five Hundred as somewhat plain, especially when compared to DaimlerChrysler AG’s brash, hot-selling Chrysler 300. But AutoPacific con******t Jim Hossack cautions against a rush to judgment.
“On balance, they’re probably doing it about right,” Hossack said. “You wouldn’t say the Camry is a startling style vehicle either. I’m not sure the people who buy those vehicles are really looking to make bold styling statement. I think it’s appropriate.”
One of the new technologies — a continuously variable transmission originally supplied by Germany-based ZF Friedrichshafen AG from a plant in Batavia, Ohio — proved problematic. But Ford said the glitches are ironed out.
“Did the transmissions come out of Batavia the way we expected them originally? Yes,” said Jim Padilla, chief operating officer. “But you know something? That wasn’t good enough.”
So Ford took control of the Ohio plant and refined its specifications — a bold move that should send a signal regarding the automaker’s commitment to quality, Smith said.
“We will step in and work hard on any given part of our assembly system where we need to,” Smith added. “Our supply system, too.”
The new car’s introduction also signaled the formal startup of Ford’s first North American supplier park, a milestone in the automaker’s manufacturing strategy.
Supplier relationships are what distinguishes Chicago from other Ford assembly sites in North America. A dozen companies have invested millions to set up operations in an adjacent industrial park dedicated to supplying Ford’s Chicago plant, which employs 2,600 workers.
As a result, Ford saves because its component inventories are reduced — as are its freight costs. Located within sight of Chicago Assembly, the supplier park saves Ford $50 per vehicle in transportation costs.
That amounts to $15 million annually, if Chicago builds to its maximum capacity of 300,000 units.
The supplier park, which created more than 1,000 jobs, was established with help from the city of Chicago in the form of $17 million in tax rebates. The state of Illinois also chipped in $100 million for infrastructure improvements.
Ford has a similar setup at an assembly site in Genk, Belgium. But Tony Brown, Ford’s vice president of global purchasing, cautions against concluding that a trend exists.
So far, suppliers are content.
“It means we carry less inventory — we’re five minutes away,” said Jeff Schropp, plant manager of a Lear Corp. facility that supplies interior trim.
Ford invested $400 million to gut the 2.7 million square-foot Chicago Assembly, built by Henry Ford in 1924 to make Model Ts, and install flexible manufacturing capability.
With no room on the land-locked site for expansion, design engineeers had to make efficient use of every square foot.
Working with partners, Ford purchased 155 acres adjacent to the factory to build the supplier park. Ford moved a major road to provide better access to the plant and spent millions on an environmental cleanup of marshland polluted by slag dumped by nearby steel plants.
“This is the hardest changeover we’ve ever had,” said Ron Evans, a 62-year-old Chicago plant employee with 39 years’ seniority. “People had to learn how to use all the high-tech tools.”
Among them are computer-controlled tools akin to electric wrenches and screwdrivers. They ensure fasteners are tightened appropriately.
While costly at the outset, flexible manufacturing portends long-term savings and enables quick response to changing consumer tastes. Chicago has the capability to build eight different vehicles from two basic designs.
A fourth vehicle, a Mercury version of the Freestyle, has already been promised to Chicago, but production is about two years away. Half of Ford’s North American assembly plants will have flexible manufacturing capability by 2006, said Roman Krygier, Ford’s group vice president of manufacturing and quality.
Once the toast of the industry, Taurus redefined family cars when it was introduced in 198? Until recent years, it topped midsize car sales and was hailed for its quality and driveability.
It and Sable will be relegated to rental car fleets - unlike the Five Hundred and Montego, Hazel said. They will be reserved for retail customers in keeping with Ford’s strategy to increase the value of its declining market share.
Commercial fleets, however, are another matter. “On commercial fleet, we never turn down business,” he said. “We always evaluate.”
Chicago’s manufacturing flexibility will also enable Ford to adjust its mix to match market demand, avoiding a gaffe made by DaimlerChrysler when it launched the Pacifica. Despite the vehicle’s edgy styling, dealers had so many high-priced models after launch, buyers balked.
Greg Smith, Ford executive vice president, second from left, Chicago Mayor Richard Daley and Gerald Bantom, UAW vice president, attend Ford's new car launch in Chicago.