Ford Motor Company has announced to launch the new hatchback version of the Fiesta in North America by 2010.

The car will enter along with the sedan in the North American market. Ford will build the hatchback version and sedan at its Cuautitlan plant in Mexico.

The plant is currently the manufacturer of the F-Series pickups for the Mexico market. But, it will soon transform into a plant that will build small cars for all of North America. The company officials confirmed that after the transformation is over, the pickups for the Mexico market will come from the U.S. plants.

The Cuautitlan plant in Mexico which builds 1-4 engines, will also make diesel engines for light and medium-duty trucks for the global market. Ford also has another plan in future to build a transmission plant in Guanajuato as part of a joint venture with German supplier Getrag.

The new multi-development effort accounts a $3 billion U.S. investment It is expected that the move will create approximately 4,500 jobs in Ford.

According to Ford’s insiders, the Fiesta will give Ford a fuel-efficient competitor against the cars such as Honda Fit and Nissan Versa. But, it is yet to be decided which configuration of the hatchback car will be built for the North American market.
Ford CEO Alan Mulally said, “Ford is absolutely committed to leveraging our global assets to accelerate the shift to more fuel-efficient small cars and powertrain technologies that people really want and value.” He further added, “Our investments in these facilities in Mexico are part of our plan to further realign our manufacturing capacity in line with the introduction of more small cars and crossovers.”

Ford is expected to increase its production in Mexico to nearly 500,000 vehicles and 330,000 transmissions by 2012. Ford’s current capacity is about 296,000 vehicles.

The U.S. largest automaker, General motors’ market share shockingly fell recently as a result of the $4 gasoline knocking the U.S. market.

The longtime industry leader, GM found its market share shrinking to less than 20% for the first time in its history. The company has not experienced such a downfall since it was founded in 1908.

Along with GM, the other leading U.S. automakers have been suffering the low market share. The combined U.S. market share of Detroit 3- GM, Ford Motor and Chrysler LLC has dropped to a record low of 44.4% which was also less than 2 percentage points ahead of the Japanese brands. The Japanese brands gained 5.7 percentage points and seized a record share of the U.S. market, 42.5% in May.

At 19.1% market share, GM sold 268,892 vehicles, lower by 27.5 percent from May 2007. The company leads over Japanese automaker, Toyota motor by less than 10,000 vehicles. GM’s pain was shared by Ford’s May sales drop of 15.6%, to 205,270 units vehicles and Chrysler dropped 25.4%, to 148,747 units vehicles.

The U.S overall May sales losing 10.7% to 1.4 million vehicles. The U.S. carmakers’ combined market share has been below 50% for three consecutive months. Instead, Toyota finished at 18.4 percent market share, only 0.7 percentage points behind GM. In units, GM’s lead over Toyota fell to 11,488 from 102,033 just a year ago.

The May share loss is the deepest and sharpest for the Detroit 3. Noteworthy that the Detroit Big 3 controlled 60% of the U.S. market in 2004.

U.S. automaker- Chrysler in particular has erased the North American productivity gap with their Asian rivals this year as reported by the Harbour Report on manufacturing on June 5.

The Harbour Report, an auto industry authority on manufacturing efficiency that measures assembly, stamping and powertrain productivity performances – plant by plant and company by company for North American automotive manufacturers. The labor hours per vehicle measure calculates the total salary and hourly labor content required to produce one vehicle. The first ever Harbour Report was published in the year 1989.

The report showed a significant improvement in Chrysler LLC. Although Chrysler struggled with financial and market share losses in 2007, it excelled in manufacturing. It has managed to slice nearly 14 hours off the average time it takes to build a vehicle.

The improvement allowed Chrysler to tie with Toyota for the most productive manufacturer in the United States with each averaging 30.37 hours to fully assemble a vehicle.

It was a 7.7 percent improvement for Chrysler from 2006, but a 1.5 percent drop for Toyota. The report said that Toyota’s inefficiencies were largely due to the rapid shift away from trucks and sport utilities as gas prices rose.

Honda with an average of 31.33 hours per vehicle, GM at 32.29, Nissan at 32.96, Ford at 33.88 and Hyundai at 35.10 followed Toyota and Chrysler in the survey.

Over all, the U.S automakers have shown a major productivity improvement in the latest survey. In this context, consultant Ron Harbour (Harbour Report) said, “It takes about one third less people to build the same number of vehicles as it did in 1990.”

It seems that worker buyouts, leaner plants and other improvements at the U.S. auto plants have helped the Detroit 3 to show such a performance. According to Harbour, “Driven by more consistent, leaner processes and buyouts of tens of thousands workers, the Detroit Three automakers in 2007 nearly erased the productivity deficit against their Japanese-based competitors, despite declining production and shrinking market share.”

The report said that Chrysler had four factories among the 10 most productive assembly plants in North America. They were Toledo South (13.57 HPV for Jeep Wrangler); Belvidere (17.09 HPV for Dodge Caliber, Jeep Compass and Jeep Patriot); Jefferson North (18.68 HPV for Jeep Grand Cherokee and Jeep Commander) and Brampton (18.78 HPV for Chrysler 300, Dodge Charger and Dodge Magnum).
GM’s Oshawa #1 plant which makes the Chevrolet Impala remained at the second position at 15.18 HPV and Oshawa #2 that builds the Buick LaCrosse and Allure finished at third position with 16.17 HPV. GM’s Lordstown, Ohio plant which makes the Chevrolet Cobalt and Pontiac G5, made it to the seventh position at 18.12 HPV.

The notable auto components maker, American Axle & Manufacturing Holdings Inc. has announced its $1.4 million backlog in new and incremental business that will begin from 2009 through 2013.

About half of new business is tied for rear-wheel-drive and all-wheel-drive products for cars and crossover vehicles. Talks are also going on to begin production of electronics products, including transmission differentials and transfer cases.

Richard E. Dauch, American Axle CEO had this to say about the new business,  “American Axle’s success in growing its new business backlog demonstrates that our long-term strategic goals of expanding and diversifying American Axle’s product portfolio, customer base, served markets and global manufacturing footprint are on track and in balance with the needs of our customers.”

Dauch said that, more than 50 percent of the part supplier’s production will be done abroad  including Brazil, China, India, Mexico, Poland and Thailand and 65 to 70 percent of that production will be shipped back to the United States.

The company will be starting about one-third of its new business from 2009 to 2013 and the remaining would start in between 2012 and 2013. The Nissan Motor Company and Renault S.A. are a few to name among the customers covered by the new business. American Axle’s Mexico plant will produce rear axles and drive shafts for Nissan’s 2010 model year
light-vehicle program.

For Renault S.A., the supplier will produce rear dual-wheel axles for a 2011 model year light commercial-vehicle program.

Last week only, the supplier’s largest customer, General Motors Corporation has forwarded the helping hand by kicking in about $215 million in settling down a three-month long strike between American Axle and UAW union. The financial assistance yet has to be received by the supplier, which will be completed in three cash payments between August and April 2009.

In this context, Dauch said, “We greatly appreciate the strategic partnership. GM has been a great customer to American Axle and American Axle has been a great supplier to GM.”