Ford gets incentives to invest $1.5 billion in Metro Detroit, add 3,000 jobs
Ford Motor Co. CEO Jim Hackett's vision for a mobility corridor stretching along Michigan Avenue from Detroit's Corktown neighborhood to Ann Arbor is growing to include the production of future vehicles.
The Dearborn automaker on Tuesday received approval for up to $35.3 million in incentives from the state of Michigan to invest more than $1.45 billion in Wayne County manufacturing facilities that would add 3,000 jobs — a piece of the $6 billion, 8,500-job commitment Ford made in its contract with the United Auto Workers ratified last month.
The investments into the manufacturing of new vehicles, including the Ford Bronco SUV, autonomous and electric vehicles — and their battery packs — will complement research being done in those sectors at Ford's future Corktown campus anchored by Michigan Central Station and its Dearborn headquarters, which is set for a redesign, officials said.
"This solidifies Ford’s presence in Michigan for both the electrification of their future vehicles as well as their autonomous vehicle operations," said Jeff Mason, CEO of the Michigan Economic Development Corp., whose governing body approved the state incentives. "We think it was critical to make Michigan the center of that."
Ford will invest approximately $750 million and add 2,700 new jobs at its Michigan Assembly Plant in Wayne on Michigan Avenue during the next three years. New equipment will support production of the new Bronco to be revealed in the spring, and the Ford Ranger pickup, as well as create a new modification center there for the vehicles.
At the Dearborn Truck Plant, Ford will add 300 jobs and invest about $700 million to support the production of the new hybrid and fully electric 2020 F-150 trucks. Ford also will create a new operation for the assembly of battery cell packs on the Dearborn plant campus.
The modification center at Michigan Assembly will be Ford's first production facility to outfit autonomous vehicles. Starting in 2021, the automaker will install self-driving technology and interiors there. Ford has not disclosed which vehicle will lead those autonomous efforts.
"We don't know what the volumes are going to be," said Michelle Krebs, an analyst for Cox Automotive. "They can modify them at this center, so they don't have to tear up the assembly line. They can make them in smaller batches."
Michigan Assembly already represents about two of Wayne's six square miles. After it invested $850 million to build the Ranger and Bronco there in 2017, more suppliers moved in, Wayne City Manager Lisa Nocerini said.
"A lot of the square footage was gone quickly, and that was huge for us," she said, and the city hopes it will happen again. "Ford Motor Co. has been a great partner."
Google affiliate Waymo LLC, an acknowledged leader in the autonomous space, this summer opened a similar facility to the planned modification center at the Detroit campus of American Axle & Manufacturing Holdings Inc. Thirty electric Jaguar I-PACE SUVs outfitted there are now in California for development and testing
Krebs says it is smart to assemble battery cell packs in Dearborn.
"There isn't a lot of capacity around the world," Krebs said. "It makes a lot of sense to build them near the plants you're going to build the vehicles in. It's no different than building an engine plant near an assembly plant. It's the heart of the vehicle, and it may not make sense to completely outsource that to a supplier."
Having the pack assembly done at the plant is an indication that Ford expects to sell a good volume of the trucks, said Sam Abuelsamid, an analyst for Navigant Research. A similar operation is at Cuautitlan, Mexico, where Ford is building the Mustang Mach-E SUV.
The automaker has not said where it will source the battery cells for the trucks. Panasonic Corp. builds batteries for the hybrid Ford Escape and Explorer.
The electric truck investment is "one of the hidden jewels" in the UAW contract, said Jonathon Mason, a 43-year-old production worker at Dearborn Truck who lives in Detroit. "There's comfort in seeing that the UAW and Ford are making advancements in that sector, but it also means somewhere down the line jobs will be lost as autonomous and electric vehicles are pushed to the forefront." Such vehicles require fewer parts.
"Investing in electrification positions the Truck Plant for the future," Dearborn Mayor John O'Reilly Jr. said in a statement. "That’s a great benefit to our community."
General Motors Co. under its contract with the UAW is investing into battery manufacturing with LG Chem Ltd. A $2.3 billion battery-cell manufacturing plant in northeast Ohio is expected to break ground in mid-2020. Fiat Chrysler Automobiles NV plans an $80 million investment into electrification as well.
Job openings will start to be posted on Ford's careers website in 2020. A high school diploma is not required, but candidates must successfully complete an online pre-employment assessment, drug screen, physical and background check. Ford also will work with Michigan Works! and other job agencies.
For the Ford projects, the Michigan Strategic Fund board approved up to 10 years of withholding tax captures valued at up to $26 million. State Essential Services Assessment exemptions for up to 15 years were valued at up to $9.3 million.
The investments build onto a growing ecosystem that includes 20 other automakers and original equipment manufacturers with a headquarters, research and development facility or technical center in Southeast Michigan, said Glenn Stevens, executive director of the Detroit Regional Chamber's automotive arm, MICHauto.
"When we see developments like this," he said. "it really does reinforce the reality that Southeast Michigan and Michigan is a place that not only put the world on the wheels from a production and assembly line perspective, but we’re not a declining region — we're a region that’s leading the next generation of mobility."
Ford's Hackett had outlined a regional system from Ann Arbor to Detroit on stage in front of the decrepit Michigan Central Station in June 2018 when the Blue Oval marked its acquisition of the former train station.
"Corktown to Dearborn to Ann Arbor to Detroit is the lynchpin of this Southeast Michigan mobility corridor," Hackett said, comparing it to an avenue in Silicon Valley dotted by venture capital firms. "This can be our Sand Hill Road, this mobility corridor."
Staff writer Kalea Hall contributed.