Ford Motor Co. will bring 1,200 new jobs to Illinois by shifting production of the new Explorer SUV to its Chicago assembly plant, the automaker announced Tuesday.
But it was unclear how many of those jobs would be at lower wages that are allowed in a new union contract.
Ford would like to take advantage of a provision in its contract with the United Auto Workers union that allows it to pay newly hired workers about $14 per hour, roughly half of what it pays current union workers.
But the Dearborn, Mich.-based company still has about 600 workers on indefinite layoff at other factories nationwide, and they must be offered jobs in Chicago before Ford can hire more workers. These workers can't be offered the lower wage.
Ford CEO Alan Mulally told reporters on the sidelines of the Washington Auto Show that "it was too soon to tell" if the 1,200 jobs in Chicago would be new positions or relocated jobs.
"Clearly we're starting to grow again, especially on the strength of our products ... and I think over time there's going to be a lot of opportunities with Ford again," Mulally said.
Union leaders in Chicago for Ford's announcement thanked the company for creating jobs as automakers try to recover from an industry slump exacerbated by a nationwide recession.
UAW Vice President Bob King said it was financial sacrifices by its members that helped Ford survive these last few years. The union has agreed not only to lower wages for new workers, but also to new work rules and health care changes to save money.
"It's your sacrifices that gave the company the money to invest in the plant and bring the products here. So thank you and thank your families for all you've done to keep Ford Motor Co. viable," King said.
The new SUV production will mean jobs at the assembly plant and at a nearby stamping plant, which makes the large pieces of the vehicle that are put together.
The assembly plant, which opened in 1924, currently has about 1,200 employees working one shift. The additional jobs will create a second shift at the plant. The stamping plant has 700 employees working two shifts.
The new Explorer will be built on the same frame as the Taurus sedan, and new Explorer production is set to start in the fourth quarter of this year. The plant also produces the Lincoln MKS sedan.
Ford has long had plans to base the once-popular Explorer on a car rather than truck frame. The new Explorer will have SUV-like towing and hauling capacity, but will be more maneuverable and fuel efficient than its predecessor, according to the company.
"It's the ultimate in positive triple whammies," said Michael Robinet, an automotive analyst with CSM Worldwide in Michigan.
The move to Chicago means not only more jobs, but more flexibility at the plant with another product being built and that means better job security for workers, Robinet said.
The company said a state program that offered tax incentives helped make the case for it to build the new Explorer in Chicago. The company is shifting production from a plant in Louisville, Ky., which will become a small-car plant instead of a truck-based SUV one.
Ford has sold more than 6.5 million Explorers since the SUV went on sale in 1990 as a 1991 model. But the segment has been suffering due to high gasoline prices. Ford sold only 52,190 of the truck-based Explorers last year, down 34 percent from 2008.
State and local officials praised Ford for its commitment to Chicago. Illinois lost 237,300 jobs between December 2008 and December 2009, according to preliminary figures from the Illinois Department Employment Security.
"The best way to help the most people is a good job," Illinois Gov. Pat Quinn said.
Associated Press Writers Ken Thomas, Tom Krisher and Dee-Ann Durbin contributed to this report. Thomas contributed from Washington, Krisher and Durbin from Detroit.
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