Ford Motor Company announced a $3 billion investment to expand production of its large Super Duty trucks at a Canadian plant initially earmarked for electric vehicle (EV) production. The decision underscores the automaker's response to robust demand for its profitable commercial vehicles amid evolving market dynamics.
The substantial investment includes $2.3 billion dedicated to upgrading the Oakville Assembly Complex in Ontario, Canada, with the remainder allocated to enhance supporting facilities in the U.S. and Canada. The Oakville plant, which ceased production of the Ford Edge crossover in May, will now add capacity for approximately 100,000 units annually when it becomes operational in 2026.
"Super Duty is a vital tool for businesses and people around the world, and even with our Kentucky Truck Plant and Ohio Assembly Plant running flat out, we can't meet the demand," said Ford CEO Jim Farley. "This move benefits our customers and supercharges our Ford Pro commercial business."
Ford's Super Duty trucks, primarily used by commercial and business customers, are currently manufactured at plants in Ohio and Kentucky. The Oakville plant's new role will provide much-needed additional capacity, addressing the overwhelming demand that has outstripped supply.
Previously, Ford had planned to invest $1.3 billion in the Oakville plant for EV production, including a new three-row SUV initially scheduled for 2025 but now delayed until 2027. This shift in strategy comes after Farley acknowledged that full electrification of large vehicles like the Super Duty trucks would not be financially viable in the short term.
Despite this, Ford maintains plans to electrify the next generation of its Super Duty trucks, although further details were not disclosed. The company's pivot reflects a broader adjustment in its ambitious Ford+ plan, which initially emphasized heavy investments in EVs. Announced in May 2021, the Ford+ plan aimed for nearly half of the company's global sales to be electric by 2030, fueled by over $30 billion in EV investments through 2025.
However, the transition to EVs has been slower and less profitable than anticipated. Ford's EV unit, "Model e," reported a loss of $4.7 billion in 2023. In contrast, the Ford Pro commercial business, which includes Super Duty trucks, earned $7.2 billion before interest and taxes in the same period.
The investment in Super Duty production is projected to secure approximately 1,800 Canadian jobs at the Oakville Assembly Complex, an increase of 400 jobs compared to the initial EV production plan. This expansion also aligns with the broader goals of Ford's Ford+ blueprint, aiming for profitable growth by optimizing the company's manufacturing footprint.
The decision to enhance Super Duty production comes in the wake of significant disruptions at Ford's Kentucky Truck Plant, which produces Super Duties and full-size SUVs. A strike by the United Auto Workers (UAW) last fall highlighted the critical importance of maintaining production continuity. The Oakville expansion allows for staggered model-year changeovers, minimizing production halts due to retooling.
Ford's commitment to domestic manufacturing remains strong, with the company employing the most hourly manufacturing autoworkers in the U.S. The Oakville plant's upgrade will not only meet immediate demand but also ensure the company's ability to support future electrification efforts.
"Super Duty production is essential for our Ford Pro customers, as spending on infrastructure and related construction activity remains high," noted Ford Pro CEO Ted Cannis. "Many retail customers have not been able to get their trucks fast enough because of our production constraints."
The broader impact of this strategic pivot includes securing additional jobs at U.S. component plants. The investment will add about 70 jobs and additional overtime at various facilities, including the Sharonville Transmission Plant in Ohio and the Rawsonville Components Plant and Sterling Axle Plant in Michigan.
"This investment will benefit Ford, our employees in Canada and the U.S., and especially our customers who want and need Super Duty for their lives and livelihoods," stated Kumar Galhotra, Ford's chief operating officer. "It is fully consistent with our Ford+ plan for profitable growth."
While the Oakville plant's retooling plan addresses concerns regarding delays in new vehicle production, the exact location for the delayed three-row electric SUV remains undetermined. Analysts suggest several potential sites, including Ford's new BlueOval City campus in Tennessee and the Dearborn Electric Vehicle Center.
Despite the challenges in the EV market, Ford remains committed to developing affordable and profitable electric vehicles. The company's focus on a skunkworks team in California highlights ongoing efforts to innovate and create EVs priced between $25,000 and $30,000.
