In Drive for Balance, Ford Parks the SUV

Firm Hitches Its Future to the Focus At Plant That Once Churned Out Hulks

Call it a fork in the road for America's second-largest automaker.

Ford announced yesterday that it is pouring $550 million into the ongoing conversion of a Michigan truck plant into a facility that will produce the Ford Focus compact -- including a zero-emissions electric version of the Focus.

For 51 years, the Michigan Truck Plant in Wayne, Mich., west of Detroit, cranked out Ford Bronco sport-utility vehicles and the classic Ford F-series pickup. For years, the Ford F-150 was America's best-selling vehicle and the metaphorical backbone of a working nation. The plant also produced the three-ton, 14-mile per gallon Lincoln Navigator and Ford Expedition -- among the biggest SUVs on the road, 300-horsepower monsters built to tow powerboats and give environmentalists something to hate.

Now, however, the facility -- yesterday renamed the Michigan Assembly Plant -- is retooling so it can build the 2,588-pound Focus, a 35-mpg fuel-sipper that pulls Ford's hopes with its little 140-horsepower engine. Those will begin rolling off the line in late 2010. The electric Focus, a year later.

Yesterday's announcement is the next step in a process that was set in motion by Ford chief executive Alan R. Mulally in July, when he said Ford would revamp the plant to produce one of Ford's small cars.

So far, Ford committed $75 million to the conversion and has received none of the $25 billion approved by Congress last fall to help Detroit's Big Three retool to make more fuel-efficient vehicles.

At its peak in the 1990s, the Michigan Truck Plant had three shifts working around the clock to produce the highly profitable SUVs, which allowed Detroit's Big Three to ignore innovation on small cars, a mistake that would haunt them.

"This was one of the most profitable plants in the world," Joseph Hinrichs, Ford vice president of global manufacturing, said yesterday. "Now in stark contrast to that, we're going with a more balanced portfolio" of vehicles.

Indeed, Ford will continue to make the big SUVs but has moved their manufacture to Kentucky. Despite the recession, Ford is turning out about as many $40,000 Expeditions and Navigators as it did this time last year, Hinrichs said.

Ford and Detroit's other automakers gave their small cars less attention in recent decades simply because they could not profit on them. High U.S. production costs -- spurred by high union wages and benefit expenses -- combined with low sales prices to make the little cars loss-leaders.

Meanwhile, Asian automakers -- unburdened by such union demands -- captured the U.S. market.

Now, however, thanks to big concessions from the United Auto Workers, "We can make money on cars made in the U.S. for the first time," Mulally told CNBC yesterday.