A line worker works on a car at Ford Motor plant in Oakville, Ont., Jan. 4, 2013.Chris Young/The Canadian Press
Ford Motor Co. has announced another new plan for its idle plant in Oakville, Ont., as the company adjusts its production lines to reflect a slowdown in sales growth of electric vehicles.
The Detroit-based auto maker said on Thursday the factory west of Toronto will begin turning out large gas-powered pickup trucks by the summer of 2026. Ford had earlier said the shuttered factory, which ended production of Edge SUVs in May, would be retooled to make electric cars by 2025. Ford later pushed back this date by two years to 2027 as demand for battery-powered vehicle sales showed an unexpected slowdown in growth.
In Thursday’s announcement, Ford said the Oakville plant will be retooled to make F-series Super Duty trucks in two years, and add electric versions later this decade. The move will cost about US$3-billion and include US$2.3-billion to install assembly and stamping operations in Oakville with a capacity of 100,000 trucks a year.
“Super Duty is a vital tool for businesses and people around the world and, even with our Kentucky truck plant and Ohio assembly plant running flat out, we can’t meet the demand,” said Jim Farley, Ford’s chief executive officer, in a press release.
Ford’s F-series trucks, which include the slightly smaller F-150, are the best-selling vehicles in Canada and the United States, and have long been sales leaders, according to Desrosiers Automotive Consulting and Ford.
“The move suggests that current Super Duty pricing and demand remains strong,” said Itay Michaeli, a stock analyst at Citigroup.
Lana Payne, head of the Unifor union that represents the plant’s 3,000-odd laid-off workers, said the faster restart will mean more certainty for the employees and the factory’s future.
She said the announcement is a testament to the good relationship between Ford and the union, which had been pushing for a new plant at the factory.
About 2,000 workers will begin returning to the job over the coming weeks and months, Ms. Payne said, and the overall work force should eventually increase beyond that size. The truck production will also boost employment by about 150 jobs at Ford’s Essex engine plant in Windsor, Ont., which makes V-8 engines for the pickups.
“There’s a big market for the [Super Duty truck],” Ms. Payne said. “That’s why we’re able to build them at Oakville.”
The Super Duty series trucks – F-250, 350 and 450 models – are used mainly for commercial uses such as construction and agriculture. They sell for about $62,000 to $133,000.
Highly profitable pickups have been the “bread and butter” of the Detroit Three for decades, boasting high margins that help cover the losses from electric-car divisions, said Erik Johnson, BMO Capital Markets’ senior economist. “This is certainly a dollars-and-cents play,” he said.
However, Mr. Johnson said Ford’s move to the pricey pickups is surprising given the much smaller spending expectations of typical vehicle buyers, which is about $40,000, and the overall trend toward smaller vehicles that are powered by batteries, plug-ins or a hybrid power plant. He added the slip in electric-vehicle demand has been mainly at Tesla Inc., while other car makers have enjoyed rising sales.
Oakville Mayor Rob Burton said Ford is the city’s largest employer, and every job at the plant supports another nine of 10 jobs elsewhere.
“It’s good news for everyone who likes to see a union and a company work together for everyone’s benefit,” Mr. Burton said in an interview. “Oakville’s economy, our social health, Unifor members, our largest business Ford and all the businesses who supply Ford of Canada are going to benefit.”