Ford to invest $1 billion to upgrade South Africa operations

Issued at 2021-02-15

JOHANNESBURG -- Ford Motor Co. will invest $1.05 billion in its South African manufacturing operations, including upgrades to expand production of its Ranger pickup truck, the automaker said Tuesday.

The investments aim to increase Ford's annual capacity in South Africa from 168,000 to 200,000 vehicles, said Andrea Cavallaro, operations director of Ford's International Market Group.

"It's the biggest investment in Ford's 97-year history in South Africa and one of the largest ever in the local automotive industry," he told an announcement event.

The move comes after Ford said last month it will cease production in Brazil after a century of building cars there, closing three factories and cutting 5,000 workers. The company has also eliminated thousands of positions in Europe as part of a sweeping $11 billion global reorganization.

he South Africa investment includes $683 million for technology upgrades and new facilities at its plant in Silverton, a suburb of the administrative capital Pretoria, and $365 million to upgrade tooling at major supplier factories.

The expanded production will create about 1,200 jobs with Ford in South Africa, increasing the local workforce to 5,500 employees, while adding an estimated 10,000 new jobs across the automaker's supplier network.

Ford also aims to make the Silverton plant entirely energy self-sufficient and carbon neutral by 2024, Cavallaro said.

Ford’s fresh investment and jobs will come as a welcome boost to South Africa, where almost a third of the workforce is unemployed. The country has been hit hard by the coronavirus pandemic, with lockdowns and a resurgence of infections weighing on activity, and 2020 economic output probably contracted the most in at least nine decades.

Yet the auto industry has been one of the country’s success stories, with international automakers including Toyota Motor Corp., Volkswagen Group and BMW operating plants in the country. The companies benefit from a manufacturing-incentive plan that runs through 2035, and Nissan Motor Co. and Daimler’s Mercedes-Benz are among those to have announced additional local investment in recent years.

Production at the Silverton plant, which also makes the Everest utility vehicle, will include VW pickups as part of strategic alliance between the carmakers. The partnership agreement was signed in June, almost two years after it was first announced, and was eventually expanded to include electric and self-driving cars.

Source: Automotive Business