Ford plans to build Ranger at Michigan Assembly

Ford Motor Co. wants to resurrect its once-popular Ranger truck in North America and build the midsize pickup at the Michigan Assembly Plant, according to sources with knowledge of Ford’s plans.

The Dearborn automaker has entered contract negotiations with the United Auto Workers with plans to bring the Ranger to the plant in Wayne in 2018, said the sources, who couldn’t speak publicly because of the sensitive nature of the talks. They said the final decision is up for discussion in the talks now underway, and must be agreed to with the union and then Ford’s board of directors.

The Ranger — which would replace the Focus and C-Max after production of those cars likely heads to Mexico — represents the kind of potentially high-profit, high-volume vehicle the union desires and likely would demand before members would ratify any contract proposal. The two sides must agree that the Ranger would be a good fit for the plant and its nearly 4,500 workers. For Ford, the pickup would mark the return to a small — but growing — midsize truck segment that would help it meet stricter fleet-wide fuel economy standards demanded by the federal government.

“There’s a real hunger for midsize trucks right now,” said Karl Brauer, senior analyst for Kelley Blue Book. “Once upon a time, there were a lot of midsize trucks in this market. The ones that are available are cashing in on the demand.”

New offerings like General Motors Co.’s Chevrolet Colorado and GMC Canyon helped midsize truck sales rise recently after a long decline. But through the first seven months of 2015, the segment represented just 2.1 percent of the overall market, according to Edmunds.com.

It’s unclear if the Ranger will be the only product brought into the 5 million-square-foot Wayne plant. Five vehicles currently are built there — the Ford Focus, Focus Electric, Focus ST, C-Max Hybrid and C-Max Energi — and workers made about 265,000 vehicles last year.

Ford in July said it was pulling production of all its vehicles out of Michigan Assembly in 2018, but both the union and automaker have said repeatedly that they expect to avoid shuttering the plant and hope to introduce a new product there.

“We actively are pursuing future vehicle alternatives to produce at Michigan Assembly and will discuss this issue with UAW leadership as part of the upcoming negotiations,” spokeswoman Kristina Adamski said in an emailed statement. Ford does not comment on future products.

Ford now builds the Ranger in South Africa, Argentina, Thailand and Nigeria for 180 overseas markets. Ford hasn’t imported the small trucks to the U.S. in part because of a 25-percent tariff on foreign-built pickups, known as the “chicken tax.” The tax got its name because it was imposed in the 1960s as payback for a German tariff on chicken.

The last North America-built Ranger was part of a fleet order for Orkin Pest Control and rolled off the assembly line in December 2011 at Ford’s now-shuttered Twin Cities Assembly Plant in Minnesota.

“It was a huge seller for them for a while,” Brauer said.

Revival forecast for segment

The midsize pickup market has shrunk considerably over the past three decades, from a peak of about 1.4 million sold in the U.S. in 1986 to a low of about 227,000 in 2013, according to Edmunds.com. Industry analysts expect the segment will grow to around 300,000 in the coming years.

Through the first seven months of the 2015, Toyota’s Tacoma holds 50.1 percent of the market share, according to Edmunds. It’s followed by the Colorado at 23.1 percent, the Nissan Frontier at 18.5 percent and the Canyon at 8.4 percent.

“The reintroduction of the Colorado and Canyon ended the precipitous market-share slide that the compact truck segment was on,” said Jeremy Acevedo, an Edmunds.com analyst.

Ford sold more than 6.6 million Rangers in the U.S. over its 29-year history. Sales peaked in 1999 at around 350,000 but dropped steadily until its final year in 2011, when Ford sold 70,832.

“It was the same basic truck from the mid-’90s; it was markedly smaller than other midsize trucks, less powerful, less comfortable and less refined,” Brauer said. “It just never evolved. Basically, it became obsolete.”

Ford at the time was coming out of the recession and looking to streamline its product lineup, and it already had committed to a number of new designs for other vehicles for both its Ford and Lincoln brands.

“There were more important vehicles for them to launch that were more important for their money,” said Autotrader.com senior analyst Michelle Krebs.

The biggest concern in resurrecting the Ranger would be that it would cut into sales of the full-size Ford F-150, analysts say. But some argue the two segments are distinct enough to draw two separate shoppers. The F-150 is the best-selling vehicle in the U.S.

“It’s a very different customer,” Brauer said. “There’s a lot of people who like the idea of having an easy-to-drive, easy-to-park truck that’s less expensive.”

Average selling prices for midsize trucks though the first seven months of this year is about $13,500 less than full-size trucks, Edmunds.com says.

The introduction of a more fuel-efficient truck — the Colorado can get about three more miles a gallon than Chevy’s most fuel-efficient full-size Silverado — would also be beneficial to Ford as it and other automakers try to achieve a federally mandated lineup average of 54.5 miles per gallon by 2025.

Although Ford is introducing an updated 2016 Ranger overseas, analysts say a North American Ranger would likely need an upgrade by 2018 to include more safety and technology features.

Plant has built myriad autos

The UAW and Ford in the coming weeks are expected to discuss whether the Michigan Assembly Plant is the best fit for a midsize truck. Since it opened in 1957, the plant has produced everything from trucks and SUVs like the F-Series, Ford Bronco, Ford Expedition and Lincoln Navigator, to small cars like the Focus and C-Max.

The plant got new life after the industry meltdown in 2008-09. Former Ford CEO Alan Mulally pledged to the UAW to bring new production to Wayne in exchange for a competitive labor agreement.

Under terms of a $5.9 billion loan from the U.S. Energy Department, Michigan Assembly received a $550 million overhaul to make it a flexible plant capable of producing a number of green, fuel-efficient cars.

Despite the overhaul, the plant has struggled recently as demand for small, hybrid and electric vehicles has nosedived.

In January, President Barack Obama came to the plant to tout the resurgent American automotive industry, even as the plant was closed that week. In April, the automaker said it would cut a shift there, indefinitely laying off 673 hourly employees and 27 salaried employees on the “C Crew.”

Potentially converting the plant to build midsize trucks “would really be making a statement about where the market is,” Brauer said.

“I don’t think you’d see someone like Ford jump into midsize trucks and be regretting it in a few short years.”

mmartinez@detroitnews.com

(313) 222-2401

Twitter.com/MikeMartinez_DN