CHICAGO _ The Ford assembly plant on Chicago's Southeast Side is not expecting any layoffs as the company phases out most cars _ including the signature Taurus sedan built there _ in favor of SUVs and trucks.
The Torrence Avenue plant, Ford's oldest in continuous operation, will end production of the Taurus and Police Interceptor sedans by March. At the same time, it will begin building a new vehicle _ the 2020 Lincoln Aviator SUV _ which, along with an all-new Ford Explorer and police version of the SUV, should keep the plant in full swing, Ford spokeswoman Kelli Felker said Thursday.
"We expect demand for these new vehicles to support the same number of employees as we have today," Felker said.
Felker said there are about 4,000 employees at the Chicago assembly plant.
Ford to discontinue all cars except for Mustang and Focus hatch �
Ford announced Wednesday that it plans to end production of the Taurus and other sedans to meet growing consumer demand for SUVs. By 2020, almost 90 percent of the Ford portfolio in North America will be trucks, SUVs and commercial vehicles, including electrified versions, Felker said.
U.S. sales of large cars have declined by 34 percent in the last five years, and there is "significant unmet demand" for Explorer as consumers abandon traditional sedans for SUVs, she said.
Ford also is phasing out the Fiesta, Fusion and C-Max sedans over the next few years. The remaining Ford car portfolio will feature the Mustang and an all-new Focus Active crossover coming out next year, neither of which will be built at the Chicago plant.
Ford announced revenue of $42 billion and net income of $1.7 billion during its first quarter earning call Wednesday, both of which were up year over year and beat analyst expectations. The automaker is targeting even better results going forward with a strategy that entails allocating capital towards the products "where we can play and win," Jim Hackett, Ford's president and CEO said in a news release.
"Given declining consumer demand and product profitability, we will not invest in next generations of traditional Ford sedans for North America," Felker said.
In addition, Ford will cut $5 billion from capital spending from 2019 to 2022, reducing it from $34 billion to $29 billion. The company will spend less on low-performing areas such as cars. It identified Lincoln as a low-performing area but Chief Financial Officer Bob Shanks said Wednesday that sales are growing and the brand is not in jeopardy.
The Torrence Avenue facility has been producing the Taurus sedan since the car's inception. It built the sedan from 1986 to 2004, when the model was temporarily retired, and resumed production in 2007. But its focus has been on SUVs since 2010, when production of the Explorer moved to Chicago from Louisville, Ky.,
Last year, the Chicago plant made 316,000 Explorer SUVs and 51,000 Taurus sedans, Felker said.
Chris Pena, president of the United Autoworkers Local 551, which represents employees at the plant, did not respond immediately Thursday to a request for comment.
When the UAW signed a new contract with Ford in 2015, the union and the automaker agreed that the Taurus would continue to be made in Chicago "through its product life cycle," according to a UAW summary. The length of that life cycle wasn't specified.
With its aeronautic design, the Taurus was initially derided by competitors as a "jelly bean," but consumers flocked to its novel styling. By 1992, Taurus was the best-selling car in the U.S., topping the Honda Accord with 409,751 units sold.
Ford currently builds all of its police vehicles in Chicago and has seen a similar shift in demand away from sedans, with the Police Interceptor Utility model now representing 80 percent of sales, Felker said.
The Torrence Avenue plant, which made the Model T when the factory opened in 1924, underwent a $400 million modernization in 2004, with an additional $180 million investment when it began SUV production in 2010.
There will be some retooling to prepare for the new SUV models, but there is no plan to shut down the plant, Felker said.
The Associated Press contributed.
rchannick@chicagotribune.com
