Ford SA announces R1,5bn investment plan

Vehicle maker Ford Motor Company of Southern African (Ford SA) plans to invest more than R1,5-billion to expand operations for its next-generation compact pickup truck and Puma diesel engine, it said on Wednesday.

The investment will start in 2009 and be split between its assembly plant in Silverton, Pretoria, and engine facility in Struandale, Port Elizabeth. Production of the new diesel engine is scheduled to begin in 2010, followed by production of the new pickup in 2011.

The investment and new manufacturing contract will transform Ford SA’s current production landscape to enhance South Africa’s significance as a strategic export base for vehicles, engines and components for Ford Motor Company.

Plans call for the Silverton, Waltloo, plant to change from its current production to a high-volume, flexible, single-platform line that will accommodate the new pickup.

The investment will increase total annual capacity at the Silverton plant to 110 000 units, with approximately three-quarters of the vehicles being produced for export, primarily to markets in Africa and Europe.

The Struandale engine plant will increase annual production for its next-generation, turbocharged, common-rail Puma diesel engine and components to approximately 180 000 units, with the majority being exported.

“Winning this investment is a major achievement for everyone at Ford SA, as well as our partners in government, Numsa [the National Union of Metalworkers of South Africa] and our local suppliers, and highlights our strategic position within the future global footprint of Ford Motor Company,” explained Hal Feder, president and CEO of Ford SA. “It also underscores Ford’s ongoing commitment to expanding our operations in South Africa.”

As part of the investment, Ford SA said it plans to continue working with the government to accelerate and enhance human resources training and development of the auto industry’s current and future workforce to ensure they possess the necessary skills required to support the launch.

Both Ford and the government recently reconfirmed their full commitment to future growth and development of the South African vehicle-manufacturing and associated industries. This includes an agreement of strategic objectives to develop worker skills, improve supply-base capabilities and accelerate the transformation of black economic empowerment.

“It’s critical for the South African government to continue to support initiatives that help foster a strong and globally competitive auto industry—one that is prepared to capitalise on future opportunities and realise the potential for growth and success,” said Feder.

He added that Ford SA will also continue to work closely with Numsa to ensure there is total alignment and commitment to deliver the cost competitiveness and world-class quality and safety standards that have attracted this investment.

The transition of Ford SA operations over the next few years will have no immediate impact on the workforce size, which currently comprises nearly 4 500 employees between its two manufacturing facilities. However, it expects to hire up to 500 additional employees by the time the realigned production kicks off in 2011.

Local suppliers to Ford SA stand to benefit from the expanded capacity, as increased local content will be sourced to meet increased production and output.

Ford SA currently achieves about 35% local content, which will improve to more than 60% when production begins. Working with roughly 110 different South African suppliers, annual spending on local components will increase from an estimated R441-million to about R2,9-billion, the company said.

Ford SA is a wholly owned subsidiary of Ford Motor Company and first set up operations in South Africa in 1923.—I-Net Bridge

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