Ford invests $700M in Oakville, Ont., assembly plant

Ford Motor Company is spending $700 million to retool its assembly plant in Oakville, Ont., in orderto expand and improve its manufacturing capability to meet the rising global demand for the company's vehicles, the automaker said Thursday.

"Today's announcement is about solidifying jobs and becoming more competitive than ever before right here in Canada," Joe Hinrichs, Ford's executive vice-president for the Americas, said at a news conference at the plant.

The funding will allow theplant to produceseveral new Ford models that will be sold in North America and around the world, Hinrichs said.

TheOakvilleplant currently makes the Ford Edge, Ford Flex, LincolnMKXand LincolnMKT.

The federal government will pitch in $71.6 million, andOntario will contribute $70.9 million to upgradethe plant.

Ottawa's contribution is part of the $250-million Automotive Innovation Fund that the government renewed earlier this year.

Ford also said it will increase its annual spending on Canadian-made auto parts by $200 million to a total of $4 billion a year.

2,800 jobs 'secured'

The investment will "secure" 2,800 jobs at the plant, the company said, but both the company and the union representing workers stressedthe effect on employment will go beyond that because ofthe many jobs that are indirectly created as a result of the plant's operations.

"Every job in this plant supports another six, sevenjobs," said Jerry Dias, president of Unifor,the newly formed union created with the merger of the Canadian Auto Workers and the Communications, Energy and Paperworkers.

Dias said the investment solidifies the future of the plant for "well over a decade" and is the result of hard-fought labour negotiations with the company.

"We won this investment;we earned this investment; we absolutely fought for this investment," he said at the Oakvillenews conference Thursday morning.

Dias said the investment is good news for workersbut will also be a welcome boost to the economy and the automotive sector.

"It's not just about the new jobs; it's about the global platform, the increase in content.The auto industry in Canada is finally on the move," Dias said.

Move to global manufacturing

The "global platform" is a term used to describe auto manufacturers'shift toward more standardization of their productsacross international markets.

Car companies have cut downon customization and increasingly produce vehicles in much greater volumesfor several markets at once with little adaptation and usingfewer production facilities, said Darren Slind, regional automotive practice leader for Canada and Latin America for the market research firm J.D. Power.

"A Ford Fiesta is a Ford Fiesta is a Ford Fiestano matter whether it'ssold in Brazil, Mexico, Canada, the United States or Germany," Slind said. "Not that many years ago, many of the manufacturers had huge variation in their product lineupacross the world. So, you had huge engineering design and production costs related to maintaining all of these different variations, these different platforms."

Ford and other manufacturers such as GM andToyota have led the way in trying to reduce that variability and produce in much greater quantitiesacross each of their platforms,Slind said.

Ford said in a news release Thursday that only nine production platforms produce 85 per cent of itsvehicles and that the global style of manufacturing will be a major focus of the planned changes at the Oakville plant.

"The global platform idea will give Ford more flexibility to adjust production volumes and, potentially, production mix of models based on how demand evolves over the coming years, and you dont get that huge pause andthe costs involved in switching over the old technology way of producing," Slind said.

Quick response to consumer demand

More flexible methods of manufacturing that allowplants to quickly respond to changingdemands in the automotive market and switch from one vehicle model to another without having to shut down production for long periods are becoming the norm, Slind said. And if Oakville makes the transition to these production methods successfully and the automotive market remains strong, it could potentiallymean the creation of new jobs at the plant and not just theretention of existing jobs.

Investing in advanced manufacturing is exactlywhat we need to do to keep oureconomy growing and cooking.Ontario Premier KathleenWynne

Upgrading the Oakvilleplant's technology so it can be more flexible andefficient, and more quickly respond to consumer demandwill "help keep OakvilleAssembly on the cutting edge of the developments of the global marketplace," said Dianne Craig, president and CEO of Ford of Canada.

The company said it will use the $840 million not only to make the plant more efficient but to research ways of makings its vehicles more fuel efficient.

"Those that anticipate, that innovate, will be the most successful," said Craig.

Ontario Premier Kathleen Wynne, who also spoke at the newsconference, agreed that modernizing production methods at plants such as the one in Oakville is what will keep manufacturing alive in the province.

"This kind of investment plays to Ontario's strengths, and investing in advanced manufacturing is exactlywhat we need to do to keep oureconomy growing and cooking," she said.

The auto industry is the cornerstone of Ontario's economy, the premier said.

"When your industry does well, our province does well," she told the Ford workers and executives gathered at the Oakville Assembly Complex.

Auto market strong and growing

Slindsees Ford's investment as a recognition of the quality of manufacturing coming out of the Oakville plant over the 60 years that it has been producing Ford vehicles anda reinforcement of the company's commitment to its Canadian customers, who have made Ford the bestselling vehicle brand in the country.

But it's alsoanacknowledgment on Ford's part of where the market is headed.

"They're looking long term, and they're seeing growth in the global market," Slind said. "The globalautomotivemarket is projected to grow."

The co-called BRICS countries (Brazil, Russia, India, China and South Africa), in particular, will drive demand in the coming years, Slind said.

"The continuing emergence of the middle class [in the region] is going to drive continued growth in terms of global demand," he said.