Ford Motor Co. announced that it will be closing the assembly line for Ford Focus and C-Max wagon in Wayne, Michigan in 2018.
The announcement was perceived as another setback to government backed efforts to set a U.S. market for nationally produced small cars. Ford Motor Co. will be moving the production outside the U.S., although it is still unclear where.
The announcement also indicated that added pressure will be put on the United Auto Workers (UAW) to simmer demands to increase wages that have been leveled with the financial crisis. At the moment, Ford Motor Co., as well as General Motors Co., and the Fiat Chrysler Automobiles are struggling to compete with the Asian market of lower-cost small cars, greatly boosted by weaker currencies.
The announcement of Ford Motors Co. also mirrors the low profit margins delivered by small cars like Ford in comparison with pickup trucks or Ford’s sport-utility vehicles.
Before the financial crisis hit, automakers in the U.S. got concessions from the UAW to lower wages in order to stay afloat altogether and keep small car production going.
The assembly plant in Wayne, Michigan currently employs 4,400 workers. Both Focus and C-Max are produced here in hybrid versions, gasoline and electric.
Before small car production was started here, Ford Motor Co. built light trucks, as well as SUVs. Shifting to small car production was a decision taken amidst low prices for gasoline, going to as much as 4 dollars per gallon.
Ford Motor Co.’s Focus production was initially split between the Michigan Assembly Plant and an assembly plant in Mexico, a popular hub for automakers. Ford’s Focus is also built in Thailand, Vietnam, China, Argentina and Germany.
For the U.S. market the decision to move production of Focus and C-Max from the Wayne Assembly Plant abroad is a stall in the efforts to create a coherent home market for fuel efficient vehicles.
The U.S. Energy Department financed Ford Motor Co. to increase production of small cars. Similarly, General Motors Co. received financing from the Treasury Department.
For Ford Motor Co., the U.S. loan commitment amounted to 5.9 billion dollars for the purpose of retooling 11 plants spanning five states for fuel-efficient vehicles.
Through the loan, 33,000 jobs were saved and the Wayne Assembly Plant was converted. Earlier in 2015, Ford Motor had already announced the laying off of 700 workers from the Wayne Assembly Plant.
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