Ford Motor Co (F.N) will move production of its Focus small cars and C-Max hybrids from its Michigan Assembly Plant near Detroit in 2018, it said on Thursday, highlighting difficulties U.S. automakers are having building fuel-efficient vehicles profitably at home.
The announcement casts doubt on the future of one of Ford's largest U.S. factories and comes just days before executives and leaders of the United Auto Workers formally kick off talks toward a new labor agreement. The UAW is expected to push for wage increases and fight company proposals to scale back healthcare costs.
Ford did not say where it would build the next-generation Focus and C-Max for the U.S. market. But less than three months ago, the company said it would spend $2.5 billion on engine and transmission plants in Mexico.
Ford has assembly plants in Mexico that make Fusion midsize sedans and Fiesta small cars. Ford and the UAW did not comment on reports that the cars would be made outside the United States.
Spokeswoman Kristina Adamski said the company must make production decisions that allow it to remain competitive.
"We actively are pursuing future vehicle alternatives to produce at Michigan Assembly and will discuss this issue with United Auto Workers leadership as part of the upcoming negotiations," she said.
Ford, like crosstown rivals General Motors Co (GM.N) and Fiat Chrysler Automobiles (FCHA.MI) (FCAU.N), got support from the U.S. government to build fuel-efficient vehicles in U.S. plants.
Michigan Assembly in Wayne was among 13 Ford factories that benefited from a $5.9 billion loan from the U.S. Department of Energy in 2009. Ford has paid back $1.8 billion of that loan meant to spur development of fuel-efficient cars.
Jimmy Settles, the union's chief liaison and negotiator with Ford, said in a statement: "We are extremely confident that a new product commitment will be secured during the upcoming 2015 negotiations and that the Michigan Assembly Plant will maintain a full production schedule."
U.S. first-half sales were down 3 percent for the Focus and 17 percent for the C-Max.
In April, Ford announced that it would cut a shift at the Michigan Assembly Plant and lay off 700 workers.
GM has said it is laying off 260 workers and cutting production at the Detroit-area Orion Assembly plant where it makes the Chevrolet Sonic. The subcompact's U.S. sales through June were down 27 percent from a year earlier.
Although GM announced 100 of those layoffs in June, it said later that month that it would spend $245 million at the Orion plant and add 300 jobs to produce a new car there, without specifying what that car will be.