Thursday October 30, 2008
KEDFA Board Approves Incentives To Protect More Than 5,000 Jobs
Ford Motor Company plans an additional $200 million investment at its two Louisville manufacturing plants under an amended incentive package approved this morning by the Kentucky Economic Development Finance Authority.
Ford plans an additional $100 million investment at Kentucky Truck Plant – on top of the $200 million in retooling over the past two years – to allow the plant to produce the Navigator and Expedition starting in spring 2009.
Ford also plans to invest at least $100 million in the Louisville Assembly Plant to provide the manufacturing flexibility to produce a new, fuel-efficient car for the U.S. market by 2011.
“These investments will help protect the jobs of more than 5,000 Ford employees in the Louisville area and thousands more people throughout the Commonwealth whose jobs and businesses depend on Ford’s continued presence here,” said Gov. Steve Beshear.
The incentive package approved today is the culmination of months of meetings and discussions between Ford, the Commonwealth of Kentucky and the City of Louisville. The package, which includes investment and employment targets to qualify for incentives, will allow Ford to finalize plans for improvements at both Louisville facilities.
“The agreement underscores the fact that Louisville is an important part of Ford Motor Company’s future,” said Mayor Jerry Abramson. “Kentucky and Louisville are partners in Ford’s effort to redefine its products for today’s consumers and keep our top-quality workforce on the job.”
Under the agreement, incentives are triggered at the minimum combined investment of $200 million at both plants. The incentives package is flexible, however, and will increase based on the amount of Ford's actual investment, subject to a cap of $180,000,000.
The total investment required to install a new flexible body shop and other re-tooling at LAP for full conversion from an SUV to a car plant will likely exceed $300 million and could go as high as $500 million.
The incentives will allow Ford to recover up to 30 percent of its total actual investment made by 2016, capped at $180 million.
The flexibility of the incentives package shows the strength of the partnership between Ford and Kentucky, said Curt Magleby, Ford’s Director of State and Local Governmental Affairs. Ford is faced with significant re-tooling costs in order to meet changing consumer demand for smaller, more fuel efficient vehicles and implement new technologies across Ford's entire vehicle fleet to meet new, aggressive national fuel economy standards.
“We are extremely grateful to our government partners for providing us with this flexible framework to help enable us to solidify our future product plans for Louisville,” Magleby said.
“While we are faced with extreme challenges, both within our industry and the economy as a whole, this action by our government partners shows the strength of the partnership between Ford and Kentucky,” Magleby said. “This helps position our Kentucky facilities competitively and we remain excited about the future of Ford in Kentucky.”