Ford Motor Co. is investing $682 million (U.S.) in its Oakville, Ont., assembly plant, a decision expected to benefit its stamping plant on Route 5 in the Town of Hamburg.
The Hamburg plant has close ties with the Oakville site, stamping metal body parts for the Ford Edge and Flex and the Lincoln MKX and MKT assembled at the plant outside of Toronto.
Ford says the new investment in Oakville will secure more than 2,800 jobs at the plant and expand its manufacturing capability. Joe Hinrichs, Ford’s president for the Americas, said in a statement the investment “is positioning Oakville as one of the most competitive and important facilities in the Ford system.”
The automaker will bring “several new global models” of vehicles to the plant to meet demand from customers in North America and elsewhere, he said. Hinrichs did not elaborate, but new vehicles assembled at Oakville could generate more demand for body parts from Hamburg, based on the two plants’ longtime connection.
The investments in the Oakville plant will allow the site’s production to adapt quickly to changes in consumer demand, Ford said. The work is under way and is expected to be completed by fall 2014.
Meanwhile, the Hamburg plant is capitalizing on the $136 million investment that Ford pledged as part of the labor contract with the United Auto Workers that was ratified in October 2011. The Hamburg plant is a key part of the region’s auto manufacturing industry.
The plant is upgrading three press lines, with three additional lines to be upgraded in the next six months, said Patrick Radtke, president and chairman of UAW Local 897, which represents hourly workers at the site.
A new door line has been installed, and eight more subassembly lines are due to be installed by the first quarter of 2014, he said.
Radtke noted that Ford had brought back workers who were laid off after the closing of a Ford factory in St. Thomas, Ont., which was another site the Hamburg plant had supported.
“Things are looking up,” he said.
Radtke said the Hamburg plant is also hiring more workers but that he could not comment on specific numbers. New jobs will be added incrementally, he said.
The Hamburg plant has 492 hourly and 73 salaried employees, said Kristina Adamski, a Ford spokeswoman. She declined to comment on planned new hiring.
When the new investments for the Hamburg plant were disclosed in fall 2011, elected officials at the time said they expected the labor agreement to lead to 120 laid-off workers’ being rehired and 400 new jobs’ being created.
Arthur Wheaton, an automotive industry expert with the Cornell University School of Industrial and Labor Relations in Buffalo, called the Oakville investment “great news” for the Hamburg plant.
The Hamburg site benefits from its location as the closest stamping plant to the Oakville assembly plant, Wheaton said. The proximity means Ford can save money on shipping costs and minimize the risk of parts being damaged in transit.
Wheaton said it is not guaranteed the Hamburg plant will get the work to support new vehicles at Oakville – plants within the system have to bid on it – but he sees the Route 5 plant as well-positioned. Along with proximity, Wheaton said, the plant benefits from the reputation of its workforce and its long relationship with the Oakville plant.
Most Ford plants have their assembly and stamping plants integrated, so the Hamburg-Oakville arrangement, with roughly 80 miles between the two factories, is an unusual one for the automaker, Wheaton said. But he said it is a “big word of praise” for the Hamburg plant that it has endured and continued to gain work even as a standalone operation.
“As long as they can maintain a competitive process and there’s a reliable [international] border, that’s a good thing,” he said.