Ford’s Billion-Dollar MO Project Brings New Jobs, Small Business

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Photo by Gwen Girsdansky/Missouri Business Alert

In a move Gov. Jay Nixon has labeled “in-sourcing,” Ford Motor Company will be hiring 1,600 people as part of a $1.1 billion project to improve its Claycomo, Mo. operations.

The Kansas City-area upgrade is part of a $16 billion investment in U.S. operations, including $6.2 billion in domestic manufacturing and assembly plants. The Missouri plant is the most expensive project Ford is undertaking because it had the best business model and had regional assistance from nearby cities and the state such as the Missouri Automotive Manufacturing Jobs Act (MAMJA). The act was signed in 2010 and took effect January 2012.

“We put together the best business model,” said Tony Reinhart, Ford’s Kansas City regional director of governmental affairs and community relations. “That’s what it takes to make this project work with a product we’ve never built in the United States before.”

The Claycomo plant temporarily shut down to retool as the U.S. assembly plant for the 2013 Transit commercial van, which has never been produced or sold in America before. The transition was a complete overhaul, with the entire half of the building that had previously housed the outgoing Econoline model being completely gutted.

“This is not your normal changeover or retooling for a new model,” Reinhart said. “This is cutting down to bare walls.”

This is part of Ford’s plan to cut down on the number of models available in order to have “one global product strategy.” Ford built 97 different models in 2008, but that was reduced to 37 in 2011. In 2011, Ford saw its sales increase by 11 percent in the United States.

As part of the reconstruction period, 1,200 people were temporarily laid off in April. These positions will be brought back once the transition finishes in 2013. When the plant resumes full employment—3,800 employees—the hiring toward the 1,600 new people will begin, and it will continue over the next four years.

This includes new positions and replacements for those who retire, transfer plants or leave the company. In any given year, Reinhart said, 50 to 100 people could retire. This helps Ford to meet the hiring standards established by MAMJA, which gives tax incentives to qualified businesses modifying or expanding an existing product.

Part of the plan for the Claycomo plant is to build a new body shop, new tooling area, new stamping facility built and upgraded paint shop. Ford will also add a second shift for the production of the F-150 truck, which happens in another part of the building, beginning in May 2013.

Similarly to the Missouri upgrade, Ford Motor Co. will be retooling and adding jobs in Flat Rock, Mich., although it will only spend about half the amount of money at about $555 million. Flat Rock will now be producing the Ford Fusion, will add about 1,200 jobs and will upgrade the plant to include a body shop and upgraded paint shop.

“Americans and Missourians have been building automobiles for generations. It’s who we are. It’s in our blood,” Gov. Nixon said in a release. “From major plants like Claycomo, to small suppliers located in every corner of our state, American auto workers keep our country moving forward.  It was vital that we keep these folks living and working right here in our communities.”

This billion-dollar upgrade may benefit local small businesses, as well, because there may be new niche markets to fill with more people being employed.

Approximately 400 people per 100,000 are starting their own businesses in statewide, CNN Money reported. This earned Missouri the number six spot in the list of most entrepreneurial states. Because of all the recent emphasis on automotive manufacturing, CNN said “move over, Detroit,” because Missouri is growing strong.

Daniel Mehan, president of Missouri’s Chamber of Commerce, told CNN Money that smaller suppliers and shops are coming in hopes of capitalizing on the revenue from Ford’s 1,600 new employees.

“It’s going to have a positive effect and we’re really excited about it,” said Sheila Tracy, president of Northland Chamber of Commerce, which oversees Clay County, home of the Ford plant. “All of the businesses benefit when people have jobs.”

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