Ford Motor Co. F) announced that it will invest roughly $773.0 million for new equipments and capacity expansions in six manufacturing facilities located in Southeast Michigan. The investment is part of the Ford's commitment to invest $6.2 billion in U.S. plants by 2015.
Ford is aggressively expanding its capacity and launching new products to meet the rising demand for fuel-efficient vehicles and F-Series pickup trucks. This investment will strengthen the manufacturing capacity of the company in Southeast Michigan and support its expansion strategies.
The company plans to invest $59.4 million in the Michigan assembly plant for the expansion of the stamping press line. The company expects to spend $305.0 million in the Dearborn stamping plant to modernize the plant, add new press lines, scrap conveyor system and other machinery and equipment. Ford will also invest $161 million in the Flat Rock assembly plant for additional machinery and equipments for assembling the new Ford Fusion and enhance the production capacity.
The company also plans to allocate $86 million in the Sterling axle plant, which will be utilized for additional machinery and equipment to meet the rising demand for axle and deal with the future model changes. Meanwhile, Van Dyke Transmission plant will see an investment of $87.7 million in machinery and equipments for the capacity expansion of 6F35 and 6F50 transmissions. The remaining $74.7 million will be invested in Livonia Transmission plant for additional transmission and test equipments.
This move taken by the company will create additional 2,350 hourly jobs and retain another 3,240 hourly jobs. This expansion of workforce is a part of the company's plan to expand employment opportunities by 12,000 hourly jobs in the U.S. by 2015.
In the next six months, Ford intends to bring a new stamping press in the Michigan assembly plant and install equipments for four new stamping presses at Dearborn stamping plant. Ford also plans to complete the expansion at Flat Rock assembly plant, where new Fusion will be produced next year.
Michigan-based Ford is one of the largest automobile producers in the world. The company operates in two segments: Automotive and Financial services. Although the company's primary selling ground is the U.S.; Europe, South America and the Asia-Pacific constitute its other major markets.
Ford posted a 17.6% rise in earnings per share to 40 cents in the third quarter of the year from 34 cents a year ago, driven by impressive results in its North American operation and, to some extent, its Asian operation. With this, the company has also surpassed the Zacks Consensus Estimate by 10 cents per share. Total profit rose 15.6% to $1.6 billion from $1.4 billion a year ago.
However, total revenue in the quarter slid 3.0% to $32.1 billion due to lower revenues in South America, Europe and Financial Services operations that offset the marginal improvement in revenues in North America and Asia. However, revenues were higher than the Zacks Consensus Estimate of $31.0 billion for the quarter.
Ford, whose cross-town rivals include General Motors Company (GM), maintains a Zacks #2 Rank, which translates into a short-term (1 to 3 months) Buy rating.