Ford’s vice president of North American manufacturing had this message for Louisville this morning: Louisville Assembly Plant is one of the stars in Ford Motor Co.’s global production portfolio.
Moreover, Louisville has a hot product in the new generation of the Ford Escape, with industry reports the Escape could reach 300,000 in sales for 2013, a level no automaker has achieved since the late 1990s.
However, Jim Tetreault, vice president of North American manufacturing for Ford., never made the big reveal – which models might come to Louisville plants in the future. Instead, Tetreault focused on the new Louisville-based Escape as one of the Detroit-based automaker’s biggest hits, and what it took to achieve that success.
This morning hundreds of business leaders in Louisville convened for Greater Louisville, Inc. and presenting sponsor Stoll Keenon Ogden‘s Business at Breakfast at the Downtown Marriott. The quarterly event features a headline speaker from the Louisville business community.
Today, it was Tetreault, discussing how Louisville Assembly Plant got to a stage of advanced technology and management that it can produce up to six different vehicles at once. For the moment, he said, Ford is focused on only one.
Demand for the new Escape has been so high that the LAP is dedicated to producing that model alone right now. Tetreault says that he’s been pressured to figure out ways to produce more Escapes and faster.
The current Escapes are the most fuel-efficient SUVs available, he noted, adding the pocket-size SUV won Popular Mechanics Magazine’s Car of the Year in 2012.
But Tetreault also touched on the wow factor of Ford’s new global reach, a reach he said is made possible in part by fundamental changes in the way the company operates in Louisville.
Overall, Ford is now exporting to 50 different countries, he said. Five years ago, their import numbers were negligible.
The Kentucky Truck Plant produces monster, superduty trucks, Lincoln Navigators and other large models. Ford commands a huge share of the heavy-duty truck market. They are now exporting Ford Expeditions to 37 countries.
Ford sales were up 12 percent this June over the same period, 2012.
Tetreault said he came to Louisville in 2001 and began helping the company transition from “old paradigm thinking to new paradigm thinking.”
The first paradigm to break was in plant utilization. The old paradigm was to operate with two 40-hour shifts and lots of overtime, He said. “But you want to run your assets 24/7.” So three shifts has become the new standard.
The downside of this was that Ford executives had to close a number of plants, but “it lowered our break-even point,” Tetreault said.
The second paradigm to break was Ford plants’ lack of flexibility. They didn’t have lines that could make more than one model.
Now one factory such as Louisville Assembly plant is able to produce multiple models on multiple platforms.
Louisville, in fact, has the most flexible factory in the world, according to Tetreault. This means “no loss changeovers.” Where plants used to have to shut down to reconfigure lines to accept new models, now they can do that without any downtime.
This allows Ford to respond quickly to market demands. It also allows for stable employment for people who work in the factories.
Ford has long had a strong presence in Louisville. The company is currently celebrating its 100th anniversary in Louisville. In 1913, the plant produced 12 Model T’s a day with 17 employees; now the two plants have 8,500 employees and produce two thousand vehicles a day. In 2012, Ford hired 3,000 people to work on the Ford Escapes and then 1,300 more when they added a third shift.
The company spent a reported $1.2 billion dollars back in 2011 to modernize and automate both plants here.
“Our recruiters have done a great job at finding skilled workers,” said Tetreault. At one time a series of job postings netted more than 18,000 applications.
Tetreault was refreshingly candid about from where Ford executives adopted their new manufacturing strategies.
One innovation that Tetreault brought to Louisville after seeings something similar at a Toyota plant overseas is a simulated assembly line for training purposes. Jobs for the Louisville area plants require anywhere from five weeks to nine months of training– before the actual on the job training begins. This simulated assembly line helps both trainees and managers figure out who’s cut out for line work sooner by putting trainees through the real-life paces of line work.
Mayor Greg Fischer, who had dined with Tetreault last night, made an unplanned appearance to open the event.
“This is a manufacturing moment in our city,” he said. In May, Forbes Magazine ranked Louisville as the number two “manufacturing boomtown” in the U.S.
More and more, the mayor explained, we need to be thinking about “regional economies” and last week, he said, there was a milestone meeting of BEAM (the Bluegrass Economic Advancement Movement), a regional partnership between Louisville, Lexington and Southern Indiana.
In that meeting, the members came up with “one vital goal”: to continue workforce development and cultivate the region’s human capital.
The CEO of GLI, Craig J. Richard came from Houston to head up the organization in January 2013. He said he had “three goals” as CEO of GLI: “1) Jobs, 2) more jobs and 3) good paying jobs.”
He said, “To compete globally, we have to have a talented and educated workforce… We need to spread the gospel of the Louisville region.”
To that end, GLI has engaged Market Street Services, an economic development consultant with whom Richard has worked a number of times. Market Street will lead them through some strategic planning. Steve Williams of Norton Healthcare is chair of this project.
Richard asked the business community for their buy-in on this endeavor.
Kendrick Riggs of Stoll Keenon Ogden introduced Jim Tetreault. The law firm has sponsored these events for more than 15 years.
Louisville’s Ford plants strive to be good corporate citizens. Last year, employees alone donated $1.6 million to causes including the United Way, the Juvenile Diabetes Foundation, the March of Dimes. Carpenters from the plants built and installed 26 handicap ramps for housebound Louisville residents.
The Ford Corporate Fund donated $300,000 in 2012.
Environmentally, the plants have been striving to be more sustainable and green. The LAP recently took 18 millions of gallons of water a year out of the wastewater system by installing permeable parking lots at the plant.
The next Business at Breakfast event is actually a lunch event on August 5 at 11:30 a.m. at the Downtown Marriott.
Tickets are $35 for members and $55 for non-members.
The special guest will be Major General Jefforey A. Smith, Commanding General U.S. Army Cadet Command and Fort Knox, KY.