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Ford to Expand Michigan Factory for Electric F-150

By Mike Colias 

Ford Motor Co. is expanding its largest and oldest factory to make electric pickup trucks, a high-profile manufacturing investment in a key battleground state where jobs remain a focus on the campaign trail.

Ford will spend about $700 million to expand its River Rouge plant, adding 300 jobs at the sprawling, century-old complex a few miles from the company's Dearborn, Mich., headquarters, the company said Thursday.

By mid-2022, Ford will begin making battery-powered versions of the F-150 pickup, its flagship vehicle and major source of its bottom line.

During an event at the factory Thursday, Ford's top executives plan to underscore the company's commitment to American manufacturing, according to prepared remarks. The message comes a week after President Trump and Democratic presidential nominee Joe Biden touted their jobs records during dueling campaign stops in Michigan.

Such job announcements became a focal point during the last election campaign, when Mr. Trump criticized auto makers for overseas production, including blasting Ford for plans to build a small-car plant in Mexico. Ford later backed away from the project, citing market demands but also Mr. Trump's "pro-growth" strategies for business.

In an advertising campaign for this fall, Ford plans to play up its status as the top producer of vehicles in the U.S., executives say.

Ford builds more vehicles in America than General Motors Co., even though GM sells more in the country. GM and Fiat Chrysler Automobiles NV each build more vehicles in Mexico than Ford, according to data from research firm Ward's Intelligence.

Kumar Galhotra, Ford's president of the Americas and international markets, said having a heavier U.S. factory presence in the U.S., rather than Mexico, where labor is cheaper, results in a substantial profitability gap with rivals. He wouldn't quantify the disparity.

"We make a choice to stay here ... because we believe in a strong manufacturing footprint for the country," he told reporters during a conference call.

The electric F-150 will be more powerful and accelerate faster than its gas-powered trucks, and be as much as 40% less costly to maintain, company executives said.

Electric vehicles require less routine maintenance -- they don't need oil changes, for example.

In addition to the electric truck, Ford is starting production at the River Rouge plant of a new version of the regular F-150, the pickup's first redesign since 2014.

The electric model will go on sale around the same time other electric pickups will be hitting the market, many from companies that have been in existence for less time than a lot of F-150 pickups on the road today.

Electric-vehicle leader Tesla Inc. is planning a futuristic-looking Cybertruck. Other upstarts include Rivian Automotive and Bollinger Motors, both Michigan-based startups; and Ohio's Lordstown Motors Corp. has electric pickups in the works.

Another newcomer, Phoenix-based Nikola Corp., is also building an electric and hydrogen-powered pickup with assistance from GM.

Nikola came under scrutiny following allegations by a short seller that the company made misleading claims, drawing investigations from U.S. securities regulators and the Justice Department, people familiar with the matter have said. Nikola has said the claims are false.

For decades, Ford, GM and Fiat Chrysler have dominated the U.S. market for big, brawny pickup trucks, used by contractors and ranchers to haul equipment and weekend warriors to tow boats. Toyota Motor Corp. and Nissan Motor Co. have tried to crack the big-truck market but haven't put much of a dent in Detroit's lead.

Ford and GM have responded to the electric-truck newcomers with a two-pronged approach, readying their own plug-in trucks while also joining with startups.

Ford has invested $500 million in Rivian and is working on a future electric vehicle based on the Rivian's technology, while also developing the plug-in F-150.

GM is working on an electric pickup truck based on its own technology. The company on Wednesday said it would build the mechanical guts of its future electric vehicles in house, including motors and transmissions, adopting a vertically integrated approach similar to that of Tesla.

Write to Mike Colias at Mike.Colias@wsj.com

(END) Dow Jones Newswires

September 17, 2020 08:44 ET (12:44 GMT)

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