Ford Reopens Plant With $165 Million, Ontario Says (Update4)

By Bill Koenig

March 31 (Bloomberg) -- Ford Motor Co., the world's third- largest automaker, will reopen an Ontario plant to produce a new line of engines.

Ford will invest C$170 million ($165 million) in the Essex Engine Plant in Windsor, with C$17 million in support from the province, the government said today on its Web site. The factory was shut four months ago. About 300 jobs will return, the government said.

The move is an about-face by the automaker, which has been closing plants and paring production capacity to match falling demand for its cars and trucks. Dearborn, Michigan-based Ford cut its North American factory workforce to 64,000 at the end of 2007 from 99,500 at the end of 2005.

``This is the first positive announcement we've had for a while,'' said Buzz Hargrove, president of the Canadian Auto Workers union. About 600 Essex workers were laid off in November, Hargrove said in an interview.

Ford is rolling out new engines as part of a strategy to meet regulatory demands for improved fuel economy and lower emissions. A new line called EcoBoost, intended to improve mileage by as much as 20 percent from current models, was announced in January.

Hargrove said he had no details about Ford's plans. Company spokeswoman Angie Kozleski declined to say what kind of engine would be made in Windsor or when production would begin.

Turbocharged

EcoBoost uses turbocharging, which forces more air through an engine, to boost performance without increasing fuel use. The engine will also use direct injection of small, precise amounts of fuel into cylinders. Ford said the engine would be smaller and lighter than current ones.

The autoworkers' union said March 12 it was trying to secure an engine project for Canada. The effort involved a 5- liter engine that's more fuel-efficient than current Ford engines, Hargrove said in a Windsor speech.

The CAW is seeking more work after losing about a fourth of its membership at Ford, General Motors Corp. and Chrysler LLC in the past three years.

Ford plans to introduce a V-6 EcoBoost engine in 2009 as an option on the Lincoln MKS sedan. The V-6 will produce about 340 horsepower, or about as much as a typical V-8 engine, the company said at the time.

GM and Toyota Motor Corp. are the world's biggest automakers by vehicle sales. Ford rose 13 cents to $5.72 at 4 p.m. in New York Stock Exchange composite trading.

To contact the reporter of this story: Bill Koenig in Southfield, Michigan at wkoenig@bloomberg.net.

Last Updated: March 31, 2008 16:06 EDT

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