Sunday, 17 March 2013
Ford nears break with Escobedo
Ford is nearing the point when it will launch production of F-650 and F-750 medium commercial vehicles at its Ohio Assembly Plant in Avon Lake.
In December 2011, Ford Motor Company announced plans to save 1,400 jobs by investing $128 million at its plant in Avon Lake, west of Cleveland and close to Lake Erie, to convert production of its E-Series van line to commercial trucks then made in Mexico. Executives said production would be transferred in 2014.
At the time, Jim Tetreault, vice president of Ford’s North American manufacturing operations and a former plant manager in Avon Lake, said the plan would provide steady work for a plant that previously had faced many downturns.
Executives pointed out that provision of the investment would prevent shutting down OAP in 2014 when the facility phased out production of Econoline vans.
In approving the plan executives also signed up to a 15-year, 50 per cent job retention package that would start 1 January 2014.
Back in May 2012, plant manager Alex Maciag described the OAP as one of the highest performing facilities producing commercial vehicles. She is expected to guide the Avon Lake facility through its transition phase from being a van plant to a commercial vehicle facility. Planning for the transition is being handled by engineers in Dearborn.
Maciag has been with Ford for most of her career. Avon Lake is expected to build Econoline vans at least until the introduction of the F-650 and F-750 trucks.
But when production does begin this later year, the action will sever an important strand that has bound together two important companies: Ford Motor Company and Navistar International Corporation.
For turn back the clock 12 years to August 2001 and it was then that Ford and Navistar International Corporation finalised their plans to form a joint venture (JV) to build medium commercial trucks. Plans also called for the JV also to furnish truck and diesel engine service parts to Ford and International and explore ‘other advanced diesel engine opportunities’.
Their joint venture was named Blue Diamond Truck Company LLC. It was set up to produce Class 6 and Class 7 medium commercials to be marketed independently under the Ford Division brand and International’s brand. The trucks were to be produced at Navistar’s plant in Escobedo, Mexico.
Plans at the time called for both companies to expand their ranges of commercials as both companies would contribute intellectual property to the JV. Navistar inputted a major portion of its Escobedo truck facility while Ford made a cash contribution to the then 50-50 joint venture. No other financial details were released at the time.
Since then, the two companies have been uneasy bedfellows as they pass through stormy waters together, most notably involving the infamous occasion of the 6.7-liter PowerStroke engine that Navistar supplied to Ford from 2008 through to 2011. Ford terminated that supply contract following dissatisfaction with the performance/quality of the PowerStroke engines.
Since inception, not much has been heard about Blue Diamond. But now the Ford rumour mill is beginning to ask when the plug will be pulled and when will production of F-650 and F-750 trucks actually move to Avon Lake. Further, what will then happen to Blue Diamond?
The F-650 and F-750 trucks are powered either by the Cummins 6.7-litre diesels or the Ford V10 gasoline engine that is fitted to F-650s. Transmission choice includes ‘boxes from Allison, Eaton and Spicer with the Ford Torqueshift offered only on the F-650.
Will Ford’s 6.7-litre Scorpion diesel, with its compact graphite iron (CGI) cylinder block, built at the Chihuahua Engine Plant (CEP), Mexico find its way into F-650s and F-750 built in Avon Lake?
Insiders reckon Scorpion is not an ideal engine for Class 6 and Class 7 trucks; it is principally a high-output pick-up truck diesel designed specifically for the duty cycles seen in the F-250 and F-350 trucks. The Cummins 6.7-litre diesel on the other hand has versions designed for Class 6 and 7 duties, but is still a ‘little light’ for the upper end applications in Class 6 and Class 7, according to some sources.
Competition in the Class 6 and Class 7 sectors is tough in the US with Freightliner and International being the main contenders. Freightliner has a sound product, while International’s emissions problems appear not to have affected its medium truck sales as much as its heavyweights. Ford will not find it easy.
Meanwhile, at the time of the JV’s formation, optimism flowed freely between the two parties as they began their new relationship.
For example, Jack Allen, the then newly named general manager of the JV said a new common chassis, based on International’s then recently introduced high performance chassis, would be used for commercial trucks rated at 18,000 to 33,000lb gross vehicle weight (gvw).
Allen emphasised that Ford and International would separately determine their customers’ needs for cabs, interiors, vocational focus, nomenclature and other brand characteristics.
Also, International-branded trucks would use International I-6 or V-8 engines while Ford branded trucks would offer International diesel engines as standard and other ‘industry engines’ as options. The statement then claimed that International ‘is the world leader in the production of mid-range engines in the 160bhp to 300bhp range’.
Prototype production of the Ford truck was due to begin late 2001 with full production scheduled to begin ‘late 2002’. International’s medium truck was already by that time in production.
Initially, the JV would produce Class 6 and Class 7 medium trucks, but plans called for the expansion later to include lighter weight Class 3 to Class 5 commercial trucks of 10,001lb to 19,500lb gvw. The first of these was due in 2003.
“In addition to expanding a strong business relationship between Ford and Navistar, the JV will increase the speed of new product development and improve economies of scale in manufacturing and parts procurement,” added Allen at the time.
Equally optimistically, David Tarrant, Ford’s manager of commercial truck strategy (and business and strategy director for the Blue Diamond JV) at the time noted: “The new partnership creates many new opportunities for both parent companies to compete more effectively in the worldwide commercial truck business.”
Exciting new ideas
“We are looking at a number of exciting new ideas which will be developed in the next several years,” he added.
It was agreed each company would have equal representation on the JV’s eight-person executive board, and neither company would have an equity stake in the other’s parent company. Chairman of the executive board was Dan Ustian, then president of International Truck and Engine Corporation’s engine group. Ustian has since left Navistar.
The OAP has had its ups and downs. It hit the headlines in October 1994 when Deborah Kent, 41, became the first black woman to manage a plant in the Ford’s entire worldwide manufacturing system.
Kent joined Ford in 1987 as area manager at the company’s Wixom, Michigan plant; she later held managerial posts at the Dearborn Assembly Plant (DAP).
When Kent joined in 1994 payroll numbers at the Avon Lake facility totalled 3,805 – a far cry from the 1,900 or so when the investment plans were announced in 2011. In 1994, Kent’s annual budget was $300 million while the plant’s daily output of Mercury Villager and Nissan Quest minivans amounted to 89 units. Prior to becoming manager of the Wixom plant in February 1994 Kent had been manufacturing manager at the Chicago Assembly Plant (CAP).
Following closure of the Lorain Assembly Plant, the Ohio Truck Plant, subsequently renamed the Ohio assembly Plant, became the assembly point for Econoline E-150/250/350/450 vans as well as chassis for box trucks.
Now, when Econoline production ends later this year, the plant is factored to build the F-650 and F-750 medium weight trucks and frames currently made in Mexico.
Ford also plans to shift production of a new motorhome chassis to Avon Lake, according to a recent contract summary between the United Auto Workers (UAW) and Ford.
At the time of announcement in 2011 of the $128 million investment, Tetreault declared that in shifting production from Mexico, Ford had made a commitment to manufacturing in the United States that would add 12,000 jobs and require a spend of $16 billion in the nation over the next four years. It was stated too that the commitment would add at least 5,750 new UAW jobs.
He said: “You have to compliment Ford. They had a chance to move to Mexico and they didn’t do it. They invested right here in Avon Lake, and it’s fantastic.”
The Econoline van is sure to be missed by many when it goes away this year, but Ford hopes its place will be taken by Transit which is made at Ford’s renovated Kansas City Plant in Missouri.
On 5 March 2013, Ford in Dearborn announced Transit chassis cab and cutaway models will join ‘the industry’s broadest range of commercial vehicles which include E-Series cutaway and stripped chassis, F-series Super Duty chassis cab, F-650 and F-750 medium-duty chassis cabs and F59 stripped chassis’.
As well as the standard 3.7-litre V6 engine, Ford offers the 3.5-litre EcoBoost engine proven in the F-150 and an ‘all new’ 3.2-litre PowerStroke diesel option.
Another move triggered by the recent Ford/UAW contract impacts production of the Transit commercial van which will be ‘insourced’ from Turkey to Ford’s Kansas City plant, while Ford’s assembly plant in Louisville, Kentucky, is scheduled to build a ‘new, unnamed vehicle’, in addition to the next generation Ford Escape. ∎