(Updates share price in final paragraph.)
Feb. 20 (Bloomberg) -- Ford Motor Co., the second-largest U.S. automaker, plans to begin making in Ohio a small four- cylinder engine that it builds in Spain, according to a person familiar with the matter.
Ford’s move to build the 2-liter engine at its factory in Brook Park, Ohio, eventually will create as many as 750 jobs, said the person, who asked not to be identified ahead of an announcement tomorrow. The Dearborn, Michigan-based company has been building the engine in Valencia, Spain. Kristina Adamski, a Ford spokeswoman, declined to comment.
Chief Executive Officer Alan Mulally revived Ford by overhauling the company’s lineup and boosting the fuel efficiency of models such as the Focus compact car. Ford is hiring in the U.S., where auto sales climbed last year by the most since 1984, and retrenching in Europe, where new-vehicle registrations hit a 17-year low in 2012.
“You have to build where the market is,” Mike Gammella, president of UAW Local 1250, which represents the Ohio plant’s 1,065 hourly workers, said today in a telephone interview. “We’re seeing the outsourcing craze come back around. Outsourcing wasn’t all it was cracked up to be.”
Ford joins companies including Apple Inc. in reversing shifts in manufacturing to overseas markets because of lower labor costs. Apple last year year pledged to invest in making Mac computers in the U.S. Since 2007, the United Auto Workers has agreed to let automakers hire new workers who forgo traditional retiree health care and pensions as well as work for lower wages than more senior employees in exchange for jobs that would have gone to other markets.
The U.S. has gained 490,000 manufacturing jobs since February 2010, when factory employment slumped to a seven-decade low. The shift of jobs back to the U.S. from China may contribute to 2 million to 3 million new jobs by the end of the decade, Boston Consulting Group said in a March 2012 report.
“We’ve become the low-cost producer and the highest- quality producer,” Gammella said.
The Valencia plant’s 2-liter EcoBoost engines are used in the company’s Focus, Explorer, Edge and Fusion models, according to Ford’s website. The Ohio plant produces the 3.5-liter V-6 EcoBoost used in the Ford F-150 pickup, the company said on a separate page of its website.
Deliveries of the Focus surged 40 percent in the U.S. last year to 245,922, topping General Motors Co.’s Chevrolet Cruze and Hyundai Motor Co.’s Elantra, according to researcher Autodata Corp. The Focus was the third-best selling compact behind Honda Motor Co.’s Civic and Toyota Motor Corp.’s Corolla.
The Associated Press reported Ford’s plans for the Ohio plant yesterday. Ford fell 3 percent to $12.60 at the close in New York.
--With assistance from Jeff Green in Southfield, Michigan and Carlos Torres in Washington. Editors: Bill Koenig, John Lear