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Upgrade helps Hamburg Ford plant put its stamp on vehicles

The mammoth machines inside Ford Motor Co.’s stamping plant in Hamburg churn out vehicle parts, destined for an assembly plant outside Toronto and other Ford factories.

With a mighty rhythm felt through the floor, the presses methodically create metal parts like hoods and body sides. Eventually, the parts will give shape to vehicles like the Ford Edge.

The plant along Route 5 is in the midst of an extensive upgrade, thanks to $150 million in new investment. Among the other vehicles the plant supports is the aluminum-bodied F-150 truck, a showroom hit. The F-150 work pumped up the plant’s volume in the aluminum parts segment.

And with lower gas prices tempting consumers back to bigger vehicles, like the Edge and the F-150, there’s plenty of work to do at the Hamburg plant. So much work, in fact, that Ford this week cut in half the annual two-week summer vacation.

By chopping a week from its summer shutdown at 14 plants that help make its hot-selling sport-utility vehicles and the F-150 pickup, Ford expects to produce an extra 40,000 vehicles. In contrast, the automaker also is cutting a shift of 700 workers at a factory that makes small cars and hybrids, which have lost popularity as gas prices have dropped.

Edge sales jumped by 78 percent in April and rose by 34 percent to a record high in May, with demand so strong that the vehicles were sitting on a dealer’s lot for only 13 days before sale, Ford said. There was just a 26-day supply of F-150s on dealer lots in May, less than half of the 60-day supply that dealers typically have in stock.

“I’m very happy with it,” said Joe Bushen of Blasdell, a 16-year employee. “It’s good for the plant, no doubt about it.”

The new investment also benefits the region’s economy, by reinforcing a cornerstone of its manufacturing base. Plants rely on these kinds of upgrades to remain relevant; factories stuck with outdated equipment watch their prospects fade within the corporate family.

Growing again

The Hamburg plant’s hourly and salaried workforce has climbed back to about 950 employees. Though far from its 7,000 or so employees of decades ago, it is sizeable for a modern-day, heavily automated factory, and a significant jump from the lows of a few years ago. Plus, the plant has brought aboard some workers who are new to the industry.

The new investments are not yet complete, but plant manager David Buzo likes what he sees so far. “It’s good to see the plant come back alive, and these people getting jobs.”

The region’s mature manufacturing giants – like Ford, GM Powertrain, Goodyear–Dunlop and Dupont – employ far fewer than they once did, but their continued viability bodes well for the region’s manufacturing base, which has shifted to more advanced production methods. Those new processes are harder to duplicate in low-wage countries like China, the home of much of the less-skilled factory work that was once done in the United States.

Since 1990, more than four of every 10 factory jobs in the Buffalo Niagara region have disappeared in a long, painful decline that caused many families to leave the area to find work and forced others to shift to lower-paying jobs in the service industries.

But the Ford plant’s resurgence also is a sign of the small rebound that local manufacturers now are experiencing. Over the past five years, the region has regained 4,000 factory jobs as manufacturers regained their footing following the depths of the recession that had pushed manufacturing employment to an all-time low in 2010.

Big investment

The plant has installed a number of new press lines to generate aluminum parts for the F-150. It also has a new “blanker” press, to cut aluminium to specific sizes for creating stamped parts. There are also new assembly lines to support the new Edge and Lincoln MKX vehicles at the Oakville, Ont., plant. And the plant is investigating adding more assembly lines to support the launch of Ford’s new Super Duty truck next year, which also will be aluminum, said William Kirk, the Hamburg plant’s controller.

Stamping operations are typically found next to assembly plants to simplify shipping and keep costs low. In Hamburg’s case, the closest Ford assembly plant is in Oakville, more than 80 miles away and across an international border. (Ford used to assemble vehicles at Buffalo’s Outer Harbor, but that work ceased in 1957.)

Buzo said the Hamburg stamping plant, which debuted in 1950, has demonstrated its location is no deterrent to success.

“You’d think that the plants that are co-located have more opportunity because all they have to do is walk to another building at the very most, whereas we’re an hour and a half away,” Buzo said, referring to Oakville. “But yet we have a very, very good relationship with the assembly plant. Not only do we communicate very well, we’re only an hour and half way. I can tell my quality manager to jump in the car and see what we got.”

Brent Merritt, the Ford Oakville assembly complex plant manager, said the Hamburg plant is “essential” to his plant’s daily output. The close proximity, he said, allows the stamping plant’s workers “to respond to our immediate needs and minimize disruptions.”

More than 60 percent of the parts the Hamburg plant produces are shipped by railcar to the Oakville plant.

A new Edge

This is an advantageous time to have a strong relationship with the factory up the Queen Elizabeth Way.

Earlier this year, Ford launched production of the 2015 Edge at the Oakville plant, with plans to export the vehicle to more than 100 countries. The automaker also said it was adding 400 jobs at the plant, on top of the 1,000 new employees announced last year. Ford has committed more than $700 million in investment in the complex.

The Oakville site has added new robots and upgraded others. Put those decisions together, and Ford clearly has a long-term interest in the factory. To top off the cross-border connection, the president of Ford Motor Co. of Canada is Hamburg native Dianne Craig.

More parts

The Hamburg plant supports two other vehicles assembled in Oakville: the Ford Flex and the Lincoln MKX. “Not only do you have an Edge that we’re launching, but right behind it you’ve got a new MKX, which is all new,” Buzo said. “Before it had common parts, like for the doors and the body sides and that, but now the styling is all unique for the Lincoln. So you’ve got more panels that we’re going to be producing for the MKX than we made before. So it’s more parts, more jobs. It’s all more maintenance on the equipment. It’s a good win-win situation. And the vehicle’s sharp. I think it’s going to do well.”

The Hamburg plant also makes parts for plants in Ohio, Kansas City, Kentucky and Michigan, plus Venezuela and Mexico. “Almost all of our assembly plants, we’re making some parts for,” Buzo said.

The amount of spending Ford is devoting to its stamping operations is notable, said Ron Harbour, senior partner in charge of global automotive manufacturing at the Oliver Wyman Group, which tracks plants’ performance. “It’s been a long time since they made significant investment in their stamping division.”

Ford’s spending at the Hamburg plant underscores another point, Harbour said: “They wouldn’t make that kind of investment if they weren’t planning to keep it going for some time.”

And Harbour said it is good for a plant to be capable of handling aluminium parts, which are becoming more common in auto production. The material lowers vehicles’ weight and, consequently, improves fuel economy.

Rocky road

Buzo has been the Hamburg plant manager for about a decade. He recalled Ford introducing the Edge as he was arriving, and then coping with the shutdown of Ford’s assembly plant in St. Thomas, Ont., which made the Crown Victoria and the Mercury Marquis. Along came the Great Recession; Ford did not file for bankruptcy, but endured tough times like other automakers.

Through it all, the Hamburg plant survived, albeit at times with a smaller workforce.

Contrast that with present day. U.S. auto sales are rising to numbers unseen since before the recession, and Ford’s eligible hourly workers this year received profit-sharing checks of $6,900, based on 2014 results.

This is a contract year for the Detroit Three and the United Auto Workers. Their labor agreements expire in September, and experts believe issues like the two-tier wage system will be contentious.

Buzo described plant management’s relationship with UAW Local 897, which represents the local workforce, as “pretty good. We’re still moving ahead. There’s still opportunity, though. There’s always opportunity. I don’t care how good you are. If you stop moving ahead, your competition’s catching you.”

While national contract talks between the automakers and the UAW are centered in Detroit, local labor agreements are negotiated at the plant level.

Safety training

New and improved technology is not the only story at the Hamburg plant. To keep the plant running smoothly, Buzo keeps returning to two topics that are very much about people: safety and training.

The plant won a Ford safety award for its 2014 performance. Buzo said that track record starts with routinely walking the floor with UAW representatives to look for issues, and including workers in safety meetings. “It’s like another set of eyes and another piece of input into safety,” Kirk said.

The upswing in hiring has brought aboard some people who have never before worked in a manufacturing plant, and they need to understand the potential hazards. Buzo cites the example of fork-trucks, and how workers must make sure they are visible to those vehicles’ drivers. “We have new people sit behind the wheel so they can see what the driver’s point of view is,” he said. “You have to walk defensively.”

Buzo also sees training as an essential piece for the Hamburg plant’s continued success.

“We still need a lot of continuous training on improving our existing employees, because we’ve basically got a commitment to them, and they’re here,” he said. “And so our objective should be to make them the best. We do a lot with existing trades, electricians, they already have a certain level of education. But there is so much we could further train the production worker, and we’re upgrading their skills, but there is probably a lot more we could do there.”