Ford is investing in a new assembly facility, which will help lower costs over the long run. If successful, the effort could transform the vehicle assembly process for the first time in more than a century.
What Is Ford Planning to Do?
Ford plans to employ a tree-style assembly system that builds vehicles from the base upward rather than using a standard rolling line. The system should decrease parts usage and speed up production. By cutting the manpower and time needed to assemble its SUVs and trucks, Ford estimates up to a 20% reduction in parts costs and major overhead savings.
The Goal Is to Compete With China
The automaker hopes to reduce costs enough to compete with Chinese manufacturers and others abroad through this assembly overhaul. Foreign competitors often have cost advantages due to different wage rules and regulations, enabling faster and affordable production. Streamlining manufacturing could allow Ford to produce in the U.S. while staying price-competitive in global markets.
America Gets a Boost Too
Producing more vehicles in the United States benefits the national economy. A new plant bolsters the local area by creating customers with disposable income who will spend at nearby businesses. While exclusive U.S. manufacturing is unlikely, Ford hopes the move will inspire confidence in the country's manufacturing stability.
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