Busy 2014 for Ford with 23 Car Launches - Analyst Blog

Ford Motor Co. (NYSE: F) has massive expansion plans for next year as it intends to hire 11,000 workers in the U.S. and Asia to support the expected launch of 23 new models during the year. The automaker will also open three new manufacturing facilities, two in Asia Pacific and one in South America.

Ford intends to hire 5,000 workers in the U.S. and 6,000 workers in Asia. The company announced that among these workers in the U.S., about 80% people will be engaged in white-collar jobs related to information technology, manufacturing, quality and product development.

The Asian workers will mainly be employed in two new plants - Changan Ford Assembly Plant No. 3 and Changan Transmission Plant in Chongqing in China. It is expected that the Chongqing Assembly Plant will enhance production capacity of the company in China by 300,000 units next year. Ford will also open Camacari Engine Plant in Brazil.

With 23 product launches planned in 2014, Ford will be highly active all through the year. The automaker intends to introduce 16 vehicles in the U.S., including a Ford Mustang, Ford Transit Connect, Ford Transit and Lincoln MKC small utility vehicle. With this, the automaker will augment product launched by 3 times compared to 2013. Moreover, Ford expects that its strategy of expansion of workforce and product line will support the growth plan for the Asia Pacific region.

Ford will be manufacturing the all-new Transit from the second-quarter of 2014 at the newly restructured Kansas City Assembly Plant. For the reconstruction, the automaker invested $1.1 billion in the facility. The automaker will be adding 2,000 workers, including 1,000 new workers, at the plant. These workers will be engaged in the production of Ford F-150 together with the production of all-new Transit family of commercial vehicles, which will be produced in the plant from next summer.

However, Ford is concerned about the quality issues of the vehicles launched in the last two years. The automaker said that the launch of new Lincoln MKZ sedan was delayed due to some quality problem. Moreover, Ford recently recalled 7,329 Lincoln MKZ hybrid vehicles of model years 2013 and 2014. The recall was made to reprogram the powertrain control module. The existing module is unable to meet the U.S. regulatory requirement, which mandates that the brake should be depressed before the car can be shifted out of parking.

In November, Ford announced two recalls of its popular sports utility vehicle (SUV) Escape of the model year 2013. With these two recalls, the automaker's total number of recalls of Escape increased to seven since the vehicle was redesigned and marketed in the spring of 2012. The company recalled the vehicles as the engine cylinder head may crack due to overheating and thereby result in leakage of oil. This may eventually lead to fire.

Ford has effectively looked over the matter and the automaker expects that these quality issues will not raise any problems over the vehicle launches in 2014.

Ford is one of the largest automobile producers in the world along with General Motors Company (NYSE: GM), Honda Motor Co., Ltd. (NYSE: HMC) and Toyota Motor Corporation (NYSE: TM). Currently, Ford retains a Zacks Rank #2 (Buy).
 

 
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