Ford announces US$1.2b investment in US auto plants

Ford's new investments will be made in three Michigan locations, with US$850 billion going to its Michigan Assembly Plant to retool it for making new Ranger pickup trucks starting late next year, and Bronco sport utility vehicles in 2020. (AFP/SAUL LOEB)

Ford said all but US$200 million of the new investment was part of its labour contract with United Auto Workers, the union representing Ford plant employees, which secured a commitment for US$9 billion in investments in US plants by 2019.

But the Trump administration appeared to be taking at least partial credit for the news.

President Donald Trump, who has repeatedly singled out the auto industry and pressured them to keep plants and jobs in the country, foreshadowed the news in a morning tweet.

And White House advisor Kellyanne Conway wrote on Twitter, using the common acronym for the US president: "Two weeks after @POTUS met with auto execs... Ford plans 'significant' investments in 3 plants."

Trump visited Michigan earlier this month, where he met with auto executives and pledged to roll back auto regulations. He also hinted that a major announcement would be forthcoming.

But in announcing the new investment on Tuesday, Ford and UAW clearly credited their 2015 labour agreement.

"Thanks to collective bargaining, the hard-working men and women at each of these locations will now reap the full fruits of their labour," UAW-Ford Vice President Jimmy Settles said in the statement.

Ford's new investments will be made in three Michigan locations, with US$850 billion going to its Michigan Assembly Plant to retool it for making new Ranger pickup trucks starting late next year, and Bronco sport utility vehicles in 2020.

Ford also will spend US$150 million to expand an engine plant, where it will create or retain 130 jobs, and US$200 million to build a data centre for the increasingly technology-heavy vehicles, the company said in a statement.

The US$9 billion investment commitment applies to the UAW contract period through 2019, and the company is about half way there, Ford spokeswoman Kelli Felker told AFP.

"So far we have announced more than US$4.7 billion of investment," she said, but the data centre was not included in the contract as it does not included any new jobs.

The company in January announced a US$700 million investment in its Flat Rock Assembly plant, where it will add 700 new jobs.

In criticising free trade agreements and the outsourcing of manufacturing jobs, Trump has previously singled out auto makers, and threatened tariffs on imported cars.

During his Michigan trip, Trump also announced that he is freezing future vehicle emission targets, responding to the auto industry's request to revisit rules implemented by the administration of Barack Obama.

Trump told a round-table of automotive chief executives that he would help them if the relationship ran both ways. "We're going to do some wonderful work with you but you're going to have to help us with jobs," he said.