Ford to spend $700 million on Kentucky Truck Plant, add 500 jobs | News

LOUISVILLE, Ky. (WDRB) — Even as it invests billions in electric vehicles, Ford Motor Co. is also ensuring its gas-guzzling cash cows keep rolling off the line at Louisville’s Kentucky Truck Plant for many years to come.

The Detroit automaker on Tuesday said it would spend $700 million on equipment upgrades and add 500 full-time jobs at the plant, which makes Ford’s F-Series Super Duty pickup trucks as well as the Expedition and Lincoln Navigator SUVs. The announcement coincides with the build of the 2023 Super Duty, the vehicle’s first wholesale redesign since 2017.

Kentucky Truck, the bigger of Ford’s two Louisville plants, currently employs about 8,500 hourly workers and about 250 salaried corporate employees, according to a Ford spokeswoman.

John Savona, vice president of Americas manufacturing and labor affairs in Ford’s gas-powered car division, said the $700 million consists of “updating or adding new equipment throughout the facility to make sure we are ready for the content of the new truck.”

He said the upgrades are “primarily machinery,” as the plant’s eastern Jefferson County footprint is maxed out. Savona wouldn’t discuss the details of the 2023 Super Duty ahead of an unveiling event scheduled for Tuesday night at Churchill Downs.

The announcement comes one year after Ford and Korean partner SK Innovation revealed a $5 billion plan to build a pair of electric vehicle battery production plants in Hardin County, Kentucky. The automaker plans to grow EV sales to half of its portfolio by 2030.

Tuesday’s move underscores how, despite its electric vehicle ambitions, Ford has no plan to curtail investments in bread-and-butter internal combustion products like the Super Duty. The trucks, F-250 through F-550, range from $40,000 to $97,000 in price depending on model and options and are among the company’s most profitable products.

Ford this year began selling an electric version of its popular F-150 consumer pickup, the F-150 Lightning. But it’s unclear if or when the company would pursue an EV version of the larger Super Duty trucks, which are often used for heavy-duty work like construction.

Asked about the future of the big trucks as Ford transitions to EVs, Savona said: “What we’re producing here with the Super Duty and the capability it provides for our customers, we just don’t have — nobody has — the technology today to do what our customers expect (in electric form), so we think we have a long and strong future here.”

Ford’s Super Duty output at KTP was down about 12% in the first half of 2022 compared to the same period in 2021, according to WDRB’s analysis of company figures. The plant produced 135,428 Super Duty trucks in the first half of the year.

Ford’s F-Series franchise, which includes the F-150 not made in Louisville, has suffered declining sales since 2018. Ford doesn’t release sales figures specific to the Super Duty models.

But the sales and production declines are related to supply issues such as the worldwide microchip shortage, rather than a lack of demand for the big trucks.

“These trucks are sold before we build them. There’s a wait,” said Todd Dunn, president of UAW Local 862, the union representing hourly KTP workers. “Our main goal is to focus on, how can we get the products out of here?”

“We have teams working hard to maximize production at all of our plants, including Kentucky Truck Plant,” Ford spokeswoman Kelli Felker said.

Plant hiring now

Kentucky Truck is currently hiring for “temporary” production workers, who work a full-time schedule but do not have the same benefits and job protections as regular, full-time employees. Those jobs can be found at this link by searching “Louisville” in the location field.

Felker said the temporary jobs are the only route for new hires into Kentucky Truck Plant currently, but employees are often converted from temporary to permanent status within a few months. According to its 2019 contract with the UAW, Ford must convert temporary workers within two years.

The starting hourly wage at the plant ranges from $16.67 to $19.59 depending on the crew and shift, Felker said.

New jobs come at cost to taxpayers

Ford’s latest spending on the massive plant it has owned since 1969 comes at a cost to Kentucky and Louisville Metro taxpayers: $150,000 per new job, according to WDRB’s analysis.

On Tuesday, the Kentucky Economic Development Finance Authority expanded a special incentive the state adopted for Ford in 2007. The incentive program arose from an effort to convince the automaker not to close its other plant across town, Louisville Assembly Plant, at the onset of the Great Recession.

Over the last 15 years, state officials have expanded and sweetened the 2007 deal six times as Ford brought forward plans to spend money upgrading its plants and sometimes adding jobs. Tuesday’s expansion is the latest.

Kentucky increased the total incentive available to Ford by $75 million, to $430 million, from 2007-26. Ford had already claimed $315 million and will have another $115 million available through 2026.

“This is a special partnership. Ford is an important part of Team Kentucky, and together, we’re going to be building the automobiles and trucks of the future for many years to come,” Gov. Andy Beshear told reporters at the announcement on Tuesday, before the details of the incentive package were made public.  

Brandon Mattingly, a spokesman for Beshear’s Cabinet for Economic Development, said in an email that the incentive agreement “takes into consideration several key factors, which include job creation/retention and the significance of the investment.” He did not challenge the $150,000-per-new-job analysis.

“In addition to the creation of 500 jobs and $700 million investment in equipment, new technology and a new product platform, the agreement considers job retention of Ford’s existing employee base of more than 12,000 employees,” Mattingly said. “…The incentives also reflect the four added years of economic activity tied to the scale of the investment for a new product platform, which extends the benefits to the commonwealth and employees of the facility. As always, the incentives must be earned.”

Ford will be able to claim $20 million to $25 million a year from Kentucky in 2022 through 2026 if it hits the 12,500-employee target between its two Louisville plants, or a prorated amount so long as the total jobs is at least 11,000. The state said Ford’s current employment between the two plants is 12,200.

The new jobs will have an “anticipated average total hourly compensation” of $29, which includes the value of benefits like health insurance in addition to cash wages, according to documents from the Finance Authority. That’s $60,320 a year.

“We should be doing the math on these projects, not just what’s politically advantageous,” said Jim Waters, president of the Bluegrass Institute for Public Policy Solutions, a free-market think tank that has long criticized Kentucky’s “corporate welfare” programs for big companies.

“If you’re talking about the economic benefits of creating jobs, if taxpayers are out more or even similar amount as the job pays, where is the benefit for the taxpayer and where is the benefit for our economy?”