Automotive News Canada - November 2017 - 4

* N O V E M B E R 2 017

Hackett wants cuts,
but Canadian Ford plants
are likely immune for now

The product plan calls for more utility vehicles,
which plays into Windsor's hands
New Ford CEO Jim Hackett is keeping a strong focus on
trucks and utility vehicles. ( P H O T O : F O R D )

By ROBERT BOSTELAAR
O T TAWA C O R R E S P O N D E N T

NEW FORD MOTOR CO.
chief executive Jim Hackett
has an axe, but Ford of Canada
holds the Edge.
And that utility vehicle
- built at the Oakville, Ont.,
plant that is Ford's largest
facility in Canada - should
help the Canadian subsidiary
weather the automaker's latest round of cuts and consolidation.
Utility vehicles and trucks
are key to Hackett's plan to
focus on Ford's biggest sellers
and slash costs as the company moves more emphatically into electric and connected
vehicles.
This means the demise
of some car models, but not
the Edge or any successor on
Ford's backbone CD4 platform that could slip into the
Oakville plant.
The strategy also offers
some reassurance for employees at two Windsor, Ont.,
plants that build V-8 and
V-10 engines, mainly for

FORD OF CANADA
* Engine assembly
Two plants in Windsor, Ont.:
Essex Engine builds the 5.0
V-8; Windsor Engine builds
the 6.8 V-10. Slated to build
new 6.9 or 7.0 V-8. About
2,000 employees.

trucks, and at a new Ottawa
research centre working on
connected vehicles.
"I haven't seen anything in
particular that you can say,
'That's good news for Canada,
that's bad news for Canada,'"
said Tony Faria, co-director
of the Office of Automotive
and Vehicle Research at the
University of Windsor.

NEW INVESTMENT PRIORITIES
Hackett, the former
Steelcase boss who became
Ford's top executive in May,
replacing Mark Fields, has
revealed plans to streamline
model offerings, trim $14 billion in materials and engineering costs, and reroute onethird of engine deployment
costs to electric and hybrid
vehicles.
Many saw the announcement, made before a group
of New York investors in
October, as a bid to boost
share prices that Ford believes
are undervalued by a market enamoured with advanced
technology.
"Right now, Wall Street is
all hot over electrification,"
says Brian Maxim, a vice-president at Philadelphia-based
AutoForecast Solutions. "They
have to kind of play to that or
else they'll get burned."
But for Canadian employees already nervous over the
potential crumbling of the
North American Free Trade
Agreement, Hackett's comments spurred new fears.
"We are worried" about

Canada's prospects, said John
D'Agnolo, president of Unifor's
Local 200 in Windsor.
"The good news, though,
is they are focusing on their
trucks, their SUVs, and we
build the engines in Windsor
for those vehicles."
Ford agreed in 2016 contract
talks to build a new engine,
reportedly a 6.9- or 7.0-litre V-8
for Super Duty pickups, at its
Windsor engine plants. Ford
has since announced investments totaling $1.2 billion
for the engine refit and other
Ontario projects, including the
Ottawa research-and-development centre it took over from
BlackBerry Ltd. in March.

$204M FROM GOVERNMENT
The provincial and federal governments are kicking
in $204 million, and Ontario
Infrastructure Minister Bob
Chiarelli said that Ford has
shown its commitment to
Canada.
"At this time, there is no
impact on Ontario's workers and plants due to the company's new strategic direction," he said in a statement to
Automotive News Canada.
The University of Windsor's
Faria, however, believes any
security offered by the investments is short-term.
"The engine plants have
been given at least a number
of years with this last contract,
but I don't think that the long
term, looking at 10 years and
beyond, is guaranteed."
Likewise, he said, Oakville
could benefit from a new
high-profile vehicle to build
alongside the Edge and

* Vehicle assembly
Oakville Assembly west of
Toronto, builds Ford Edge,
Ford Flex, Lincoln MKX,
Lincoln MKT. About 5,000
employees.
* Technology
Research and Engineering
Centre in Ottawa, Ont.;
about 300 employees.
Smaller research-and-development operations in
Oakville, Windsor and
Waterloo, Ont.
* Administration, support
Headquarters in Oakville,
three regional offices, two
distribution centres.

The addition of a new V-8 for Ford's Super Duty pickups will
extend the life of the Windsor Engine Plant, which now assembles the Triton V-10. A second plant in Windsor assembles the
5.0-litre V-8. ( P H O T O : F O R D )

If they were to ever not
build vehicles in Canada
I think the loss of that
market share would be just
astronomical, and I don't
think it's a chance they'd
be willing to take.
DAVE THOMAS

President, Unifor Local 707

Lincoln MKX. Two other models assembled at Oakville, the
Flex and MKT, are expected to
be phased out.
But Faria and Unifor Local
707 president Dave Thomas
thinks Ford would be reluctant
to face what could be a significant sales drop in Canada, a
market in which it battles for
the sales lead, if it closed its
sole vehicle plant here.
"If they were to ever not
build vehicles in Canada I
think the loss of that market
share would be just astronomical, and I don't think it's a
chance they'd be willing to take,"
said Thomas, who represents
4,800 workers in Oakville.

CHASING PROFITS
Ford's Oakville factory is the lead global assembly plant for
the Edge and since 2016 has shipped right-hand-drive versions to Asia. ( P H O T O : F O R D )

He concedes, however,
that others believe any automaker today won't hesitate to
move to where it can make the
most money. General Motors
might have provided support

to that theory when it reportedly threatened to shift all
Chevrolet Equinox production
to Mexico if striking employees in Ingersoll, Ont., didn't
drop demands that their plant
be designated lead Equinox
producer. The strike ended in
October with no assurances
about the plant's future.
Oakville's union did win
lead plant status in 2016 and
now builds left- and righthand-drive Ford Edges for
export to more than 100 countries. Preserving that designation will be a priority for the
union in 2020 bargaining.
In Ottawa, some 300 software and hardware engineers work in a building that
still bears the BlackBerry
corporate logo. They're just
blocks from the headquarters of BlackBerry's QNX division, which took over from
Microsoft as supplier of software for Ford's Sync infotainment system.
With a focus on research
and development across in-vehicle modems, driver-assist
features and autonomous vehicles, the office is equally well
placed in Hackett's connected-vehicles strategy. Smaller
facilities in Oakville, Waterloo,
Ont., Cary, N.C., and Sunrise,
Fla., do related work.
Barrie Kirk of the Canadian
Automated Vehicles Centre of
Excellence, an Ottawa-based
consulting firm, believes the
centre in the Canadian capital has a strong foundation for
growth.
"They acquired a lot of really good talent there," he said.
- ANC

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