Ford Motor announced a significant change in its production plans, opting to expand production of its large Super Duty trucks in Canada instead of converting the plant into an all-electric vehicle hub. This decision comes after previously announcing a $1.3 billion investment into the Canadian plant for EV production. However, plans for a new three-row SUV have been delayed until 2027. The move to increase Super Duty production involves investing approximately $3 billion, with a major portion going towards the expansion at Ford’s Oakville Assembly Complex in Ontario, Canada.
Ford CEO Jim Farley emphasized the importance of the Super Duty trucks, stating that they are essential tools for businesses and individuals worldwide. Despite running at full capacity in U.S. plants, the demand for Super Duty trucks cannot be fully met. The decision to focus on Super Duty production aligns with Farley’s Ford+ plan for profitable growth and maximizing manufacturing capabilities. While there are plans to “electrify” the next generation of Super Duty trucks, specific details have not been disclosed.
Ford’s Ford+ plan, initially announced in May 2021, centered heavily on electric vehicles (EVs) and aimed for nearly half of global sales to be electric by 2030. The plan included over $30 billion in EV investments through 2025. However, the shift in focus towards Super Duty production signals a pullback in the original EV strategy. Despite setbacks, Ford still intends to produce the three-row EV, albeit at an unspecified plant and starting in 2027.
Ford’s EV unit, known as “Model e,” faced significant losses, totaling $4.7 billion in 2023. In contrast, the Ford Pro commercial business, including the Super Duty trucks, earned $7.2 billion before interest and taxes in the same year. The Ford+ plan originally set a target of 8% earnings before interest and tax profit margin for the EV unit by the end of 2026, but this target was later withdrawn. It would have marked a substantial improvement from the negative profit margin experienced in 2022.
The shift towards increasing Super Duty production at the Oakville Assembly Complex is expected to secure approximately 1,800 Canadian jobs initially, 400 more than originally planned for the three-row EV production. This move not only benefits Ford’s customers but also strengthens the Ford Pro commercial business, setting the stage for continued growth and profitability.
Ford’s decision to prioritize Super Duty truck production over electric vehicles reflects a strategic shift towards meeting current market demands and maximizing profitability. While challenges remain in the EV sector, Ford’s focus on maintaining a strong manufacturing footprint and delivering quality products underscores its commitment to long-term success in the automotive industry.
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