Ford (F) To Pump $900 Million Into Kentucky Plant Upgrade

Ford Motor Company (NYSE:F) has announced an investment of $900 million for upgradation of Louisville, KE truck plant. The plant will be revamped to manufacture all-new Ford’s Expedition and Lincoln Navigator models, scheduled to arrive to the dealers by the end of this fall.

Both models are full-size SUVs which will be exported to 55 markets globally. The company specially mentions China as an important base to welcome the Navigator model.

The investment will procure 1,000 U.S. hourly jobs at the Louisville plant, in addition to the $1.3 billion investment and 2,000 jobs already generated at the same hub in late 2015. Earlier, the investment was pooled in to build up an all-new Ford Super Duty. Notably, Ford’s Louisville, KE truck plant employs nearly 7,600 full-time hourly workers.

The company has also announced manufacturing actions of its next-generation Ford Focus for the North American customers. From the second half of 2019, the models will be manufactured in China only to get shipped back to the U.S.

Per Joe Hinrichs, Ford’s Executive Vice President and President, Global Operations, the company is following more cost-effective ways to deliver the next Focus model in North America, thus allowing its financers to reuse the saved money on sport utilities, plus commercial and performance vehicles.

Ford is expanding its production capacity in many emerging markets in order to facilitate supply and cost-reduction. In May 2017, the company had announced a fund of $350 million to pump into its Livonia transmission plant located at Michigan for the expansion of powertrain lineups. This investment is part of the planned $1.2 billion venture, previously announced in Mar 2017 for its three Michigan-based manufacturing facilities.

On Mar 16, 2017, the company had reconfirmed its decision to spend €600 million on its Saarlouis Vehicle Assembly Operations in Germany with a view to prepare for production of the next-generation Ford Focus.

Price Performance

Ford shares have underperformed the Zacks categorized Auto Manufacturers-Domestic industry in the last three months. The company’s shares have declined 4.6% compared with the industry’s 8.7% advance.

Zacks Rank & Key Picks

Ford currently carries a Zacks Rank #3 (Hold).

Ford Motor Company Price and Consensus

Ford Motor Company Price and Consensus | Ford Motor Company Quote

Better-ranked companies in the auto space are Allison Transmission Holdings Inc. (NYSE:ALSN) , Ferrari N.V. (NYSE:RACE) and Dana Incorporated (NYSE:DAN) . Allison Transmission and Ferrari sport a Zacks Rank #1 (Strong Buy), while Dana carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has an expected long-term growth rate of 11%.

Ferrari has an expected long-term growth rate of 14.1%.

Dana has an expected long-term growth rate of 3%.

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