Ford to export Focus car from China to U.S. in 2019


UPDATE 4-Ford to export Focus car from China to U.S. in 2019

(Adds details on Kentucky truck plant, shift in Ford's U.S.
strategy from small cars to trucks; adds second dateline)
    By Paul Lienert and David ShepardsonDETROIT/WASHINGTON, June 20 (Reuters) - Ford Motor Co <F.N>
will export the next-generation Focus compact car from China to
North America in 2019, rather than from Mexico as earlier
planned, saving the company $500 million, a top executive said
on Tuesday.
    It is the first major manufacturing investment decision made
by new Chief Executive Officer Jim Hackett, who succeeded Mark
Fields in late May. Discussion about the small-car production
shift from Mexico to China began "a couple months ago" under
Fields, said Joe Hinrichs, president of global operations.
    The decision also signals a shift in strategy at Ford, which
is responding to low fuel prices and to U.S. consumer demand by
de-emphasizing small cars while boosting U.S. production of
trucks and SUVs.
    Ford on Tuesday said it would invest $900 million at its
Kentucky truck plant to build the redesigned Ford Expedition and
Lincoln Navigator full-size SUVs this fall. It plans to export
the Navigator to China and has contingency plans to build more
of the big SUVs at an Ohio plant if demand grows.
    In January, after U.S. President Donald Trump criticized
Ford for shipping small-car manufacturing to Mexico, Ford said
it would kill plans to build a $1.8-billion Focus plant in San
Luis Potosi and instead produce the new Focus at an existing
plant in Hermosillo.
    The White House had no immediate comment.
    Although it is cheaper to build and ship cars to the United
States from Mexico than China, "this was not a variable cost
decision," Hinrichs said in a Tuesday morning briefing. "It
allows us to free up a lot of capital" because Ford now has to
retool only one plant - the existing Focus factory in Chongqing
- rather than two to supply North America.
    The current Focus will be phased out of production in Wayne,
Michigan in mid-2018, according to Hinrichs. The Wayne plant
will begin building a new Ranger midsize truck in late 2018 and
a Bronco midsize SUV in 2020.
    Ford executives told Trump last year that moving production
to Michigan of bigger vehicles that were more profitable would
secure the Wayne plant's future - a decision later praised by
    No U.S. jobs will be affected by shifting Focus production
to China, Ford said, adding that it employs more U.S. hourly
workers and builds more vehicles in the United States than any
other automaker.
    The United Auto Workers declined to comment.
    Hinrichs said "the capital saving outweighs the risk" of
having to pay a potential border tax on the Chinese-built Focus.
    Ford U.S. Focus sales have fallen 22 percent this year, as
low gas prices have helped spur more buyers into larger
vehicles. Ford's full-size F-series pick-up remains the
best-selling U.S. vehicle by a wide margin.
    Ford stock fell 0.4 percent at $11.19.
    Hinrichs said Ford remains a major exporter to China,
shipping about 80,000 vehicles a year from North America.
    General Motors Co <GM.N> has been exporting Buick and
Cadillac cars from China to the United States, as has Volvo
Cars, a unit of Chinese automaker Geely <0175.HK>.

 (Reporting by Paul Lienert in Detroit; Editing by Nick
 ((Paul.Lienert@thomsonreuters.com; mobile 313-231-0200))

Keywords: FORD CHINA/ (UPDATE 4)

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