Ford believes a major investment in a new assembly plant will help reduce costs over time. If the concept succeeds, it could reinvent vehicle assembly more than a century after the existing system was created.
What Is Ford Planning to Do?
The automaker plans to move away from a traditional rolling assembly line and adopt a tree-system that builds vehicles from the bottom up. The approach should lower parts usage and speed up production. Ford projects up to a 20% reduction in parts costs and significant overhead savings by cutting the workforce and time required to assemble its SUVs and trucks.
The Goal Is to Compete With China
By reworking the assembly line, Ford hopes to lower costs enough to compete with companies in China and elsewhere. Overseas firms often benefit from different wage and regulatory setups, allowing them to build vehicles faster and at lower cost. By streamlining manufacturing, Ford can continue producing in the U.S. while staying competitive in domestic and international markets.
America Gets a Boost Too
Manufacturing more vehicles in the United States will also boost the nation's economy. A new plant supports the local economy because surrounding businesses gain customers with more disposable income to spend. Although completely U.S.-only manufacturing is unlikely, Ford hopes this step will help stabilize American manufacturing.
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