Ford Said to Shift Michigan Small-Car Production Out of U.S.

Ford Motor Co., slated to begin contract talks with the United Auto Workers union in two weeks, plans to move production of two small cars outside of the U.S. from a Michigan factory, according to a person familiar with the matter.

The shift will occur in 2018, Ford said in an e-mailed statement Thursday, without saying where. Leaflets posted by UAW members at the Wayne, Michigan, plant said the Focus compact and C-Max hybrid will be produced in a foreign country, according to the person, who asked not to be identified revealing union communications. The company declined to comment on a location.

Ford already has laid off a shift of 700 workers in Wayne, as U.S. sales fell 3.2 percent for the Focus and 17 percent for the C-Max in this year’s first half. Small cars and hybrids have become a hard sell as U.S. gasoline prices have fallen 24 percent from a year earlier to an average $2.76 a gallon.

“We actively are pursuing future vehicle alternatives to produce at Michigan assembly and will discuss this issue with the UAW leadership as part of the upcoming negotiations,” Dearborn, Michigan-based Ford said in the statement.

Jimmy Settles, the UAW vice president who oversees relations with Ford, said that “we are extremely confident that a new product commitment will be secured during the upcoming 2015 negotiations and that the Michigan Assembly Plant will maintain a full production schedule,” His comment was in a letter posted on the UAW-Ford Facebook page.

Talks with the UAW are scheduled to start on July 23 to replace a contract that expires in September. Ford wants to lower its labor costs, which it says are uncompetitive. Ford’s average U.S. hourly labor expense, including benefits, is $57, about $9 more than at Toyota Motor Corp. and Fiat Chrysler Automobiles NV’s U.S. unit, according to the Center for Automotive Research in Ann Arbor, Michigan.