Ford to invest $3.7 billion, largely in new vehicle production
Ford is making a $3.7-billion investment in its business, which will be spread out across its plants in Michigan, Ohio and Missouri, and will expand both electric vehicle (EV) and internal combustion engine vehicle (ICE) production
The lion’s share will go to Michigan, where Ford plans to invest $2 billion to expand assembly plants in Dearborn, Wayne and Flat Rock, according to a statement from the company on Thursday June 2.
The investment there is aimed at expanding production of the F-150 Lightning electric truck, as well as the Ranger pickup truck and Mustang coupe, both ICE vehicles.
Ford began production of the F-150 Lightning in April, and the investment will support the company’s goal of quickly ramping up production to 150,000 of the vehicles annually.
The company will invest $1.5 billion to expand the company’s assembly plant in Avon Lake, Ohio in preparation for a new commercial EV, production of which will begin “mid-decade.” An additional $100 million will go toward expanding two transmission plants in the state.
Ford will also invest $95 million to add a third shift to its Kansas City, Missouri assembly plant to expand production of its Transit van line and the upcoming E-Transit electric van.
Ford aims to increase its EV production to “at least 600,000” vehicles annually, its chief executive officer Jim Farley had said in February.
The automotive industry is one of the largest suppliers of prime grade scrap to steelmakers. Production disruptions caused by the lingering semiconductor chip shortage tightened the market and contributed to higher prices this year.
Speaking at the World Economic Forum last week, Intel CEO Patrick Gelsinger estimated the world was “about halfway through” the chip shortage.
But prime grade scrap is expected to fare poorly in the upcoming June settlement.
The automotive industry is also one of the largest consumers of steel, accounting for roughly 28% of the total end-market consumption.
Fastmarkets’ assessment of the steel hot-rolled coil index, fob mill US stood at $60.06 per hundredweight on Thursday.