AUTOSHOW-UPDATE 1-Ford to invest $450 mln in electric car plant

Mon Jan 11, 2010 6:05pm EST

Related Topics

* Ford to invest $450 mln in EV production in Michigan

* Move spurred by state tax credits

* Ford will build upcoming hybrid, plug-in in home state

DETROIT, Jan 11 (Reuters) - Ford Motor Co (F.N) on Monday said it would invest $450 million to build its next-generation hybrid and a rechargeable plug-in hybrid at a Michigan assembly plant starting in 2012 after winning state tax incentives.

Ford said the move and related steps would create 1,000 new jobs in Michigan and had been made possible by tax credits that its home state extended a year earlier to stem the decline in auto-related payrolls.

The investments are part of a broad Ford electric vehicle strategy announced last year that includes introducing a battery electric version of its Transit Connect small work van this year in North America and an electric Focus next year.

Ford said on Monday the Transit Connect would have a targeted range of 80 miles per full charge and the Focus of up to 100 miles on a full charge.

The No. 2 U.S. automaker behind General Motors Co, Ford plans to build the battery-powered version of its Focus small car at an assembly plant in Wayne, Michigan.

Ford had invested $550 million at the plant -- known as Ford's Michigan Assembly Plant -- to convert it from production of sport utility vehicles to produce the Focus compact car the automaker unveiled at the Detroit auto show on Monday.

The additional investments, supported by $188 million of state incentives and tax credits, will allow the plant to handle production of the next generation of Ford hybrids and of plug-in hybrid vehicles, Ford said.

Ford also said it would move production of lithium-ion battery packs from Mexico to Michigan and would bring the design and development of the battery systems in house. It will announce a site for that battery pack production plant later.

The Maeil business newspaper in South Korea reported on Monday that South Korea's LG Chem Co Ltd (051910.KS) would sell rechargeable batteries to Ford from 2012 with annual sales reaching an estimated 500 billion won ($447 million).

A Ford spokesman said the company would not confirm the report. LG Chem's U.S. unit has reached a deal to supply next-generation lithium-ion batteries for General Motors' [GM.UL] Volt plug-in. [ID:nSEO332545]

Currently, auto parts supplier Delphi assembles the battery pack for Ford's current hybrids in Mexico. The current version uses nickel-metal-hydride batteries.

Ford also plans to produce hybrid transaxles at its Van Dyke transmission facility in Sterling Heights, Michigan, near Detroit starting in 2012.

Ford has not yet revealed plans for its hybrid and plug-in hybrid models, set to be launched in 2012. Both of those vehicles will be built on the same platform as the Ford Focus.

Plug-in hybrids are designed to run on battery power for short trips with a small combustion engine to recharge the battery on longer drives.

Unlike traditional hybrids, plug-in hybrids also can be recharged at standard electric outlets.

The investment in its electric car program was announced at the Detroit auto show by Ford Chairman Bill Ford Jr. and Michigan Governor Jennifer Granholm. (Reporting by Kevin Krolicki and Soyoung Kim; Editing by Steve Orlofsky)

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