Ford plans engine-plant upgrade with no new hiring

Ford Motor Co., boosting its factory investments without new hiring, is spending $155 million at a Cleveland engine plant and creating 60 positions to be filled by workers being laid off elsewhere later this year.

Production will start next month on a new V-6 engine for the 2011 Mustang, a Ford spokeswoman, Marcey Evans, said in an interview. Ford, which has cut its North American workforce 47 percent since 2006, will announce the program today.

Ford is spending $1.8 billion overhauling six engine and transmission plants in the U.S., Canada and Mexico. Bringing back furloughed hourly employees or shuffling them among factories helps the Dearborn, Michigan-based automaker hold down labor costs.

"If sales volume goes up and they don’t hire, they will become extremely profitable," said Van Conway, senior managing director of restructuring firm Conway MacKenzie in Birmingham, Michigan. "If volumes go up 10 percent, there will not be 10 percent more people hired. It will be closer to zero."

The 1,260 jobs being added at the engine and transmission factories getting the new investment will go to workers on layoff or being brought from other sites, Evans said. Those coming to the Cleveland engine plant are among those to be laid off when Ford shuts a nearby castings factory, eliminating 700 jobs, she said.

Still Retrenching

Ford is still retrenching as it recovers from $30 billion in losses from 2006 to 2008. The second-largest U.S. automaker had net income of $2.7 billion in 2009, when the predecessors of General Motors Co. and Chrysler Group LLC filed for bankruptcy.

Ford has 600 workers on indefinite layoff. It is cutting a shift of 900 workers in July from a Michigan Mustang factory. Ford has 41,000 U.S. hourly workers.