DETROIT (Reuters) - Ford Motor Co’s (F.N) $9 billion investment plan for its U.S. operations includes two new products for a Michigan plant that will lose production of small cars, and U.S. production of a new Lincoln luxury sedan, a proposed four-year contract with the United Auto Workers shows, the UAW said on Monday.
Ford’s Michigan Assembly Plant in Wayne, a Detroit suburb, will get an unidentified new model by 2018 and a second “no later than 2020,” a UAW summary of its new contract with Ford states.
The UAW and Ford did not disclose details of the products, but several sources with knowledge of Ford’s plans say they expect a midsize pickup truck and a sport utility vehicle reminiscent of the former Bronco SUV.
Focus production is expected to move to Mexico, UAW officials and analysts have said. The union and the company didn’t confirm that Monday.
The UAW’s Ford leaders on Monday approved the tentative agreement and send it on to a worker ratification vote. No specific timing for the vote was set, a UAW spokesman said.
In another sign of the shift in U.S. car-buying tastes toward SUVs and trucks, the Ford contract suggests the Ford Taurus, a large sedan, could be phased out.
The car will be produced at the Chicago Assembly Plant “through its product life cycle,” according to the UAW summary. Whether the Taurus will once again go out of production was not specifically stated.
A factory in Flat Rock, Michigan will shift from making mass market Ford Fusion sedans to a new, luxury car that bears a storied name, Lincoln Continental. The Fusion midsize sedan will be made “through its current life cycle, based on market demand,” at the Michigan plant, the UAW document says.
Ford plans $3.35 billion in investments at three transmission plants that will include production of six new transmissions and an unspecified number in a “new transmission family,” according to the document.
About 52,700 UAW Ford members are eligible to vote on the contract, which gradually eliminates a two-tier pay system but will still pay recent hires less than veterans. It will take eight years from hiring at $17 per hour to reach top veteran pay, which will be about $30 by 2019, the last year of the pact.
UAW workers at Fiat Chrysler Automobiles (FCAU.N)(FCHA.MI) and General Motors Co (GM.N) have already approved contracts similar to the Ford agreement. Final ratification of the GM pact is being held up as UAW leaders deliberate how to respond to the rejection of the contract by skilled trades workers.
Reporting by Bernie Woodall; Editing by Alan Crosby