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Ford will invest US$1.6b in two US factories

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Ford Motor Co will invest US$1.6 billion in two US factories to start making a new automatic transmission and expand output of certain commercial trucks, the company said on Tuesday.

[DETROIT] Ford Motor Co will invest US$1.6 billion in two US factories to start making a new automatic transmission and expand output of certain commercial trucks, the company said on Tuesday.

Ford said the moves would support a total of 650 jobs but would not say how many new ones would be created.

The announcement comes three weeks after Ford said it would spend US$1.6 billion to build a new vehicle assembly plant in Mexico, drawing fire from Republican US presidential candidate Donald Trump.

Ford has countered that it intends to invest US$9 billion in US factories, as outlined in the company's 2015 contract with the United Auto Workers union.

The larger of Ford's latest US investments will be US$1.4 billion for a production line at a Livonia, Michigan, factory to produce a new 10-speed automatic transmission for the company's rear-wheel-drive vehicles.

The Livonia plant currently employs about 1,550 hourly and salaried workers in total. The new 10-speed transmission line will employ about 500 union workers, Ford said.

"Most of the people will move from building one transmission to another," Joe Hinrichs, president of Ford's Americas operations, said in an interview.

The United Auto Workers said last fall that Ford planned to spend as much as US$1.8 billion overhauling that factory to produce three new transmissions.

Separately, Ford said it would spend US$200 million at an assembly plant in Avon Lake, Ohio, near Cleveland to add production of Super Duty chassis cab trucks, which typically are commercial vehicles such as ambulances or tow trucks.

Ford has outlined just US$1.7 billion of the US$9 billion in manufacturing investments promised to the UAW last year. The Dearborn, Michigan, company has 55,300 hourly workers at its US factories, more than any other automaker in the United States, including larger Detroit rival General Motors Co.

The future of auto manufacturing jobs has become a politically charged issue because of the federal bailouts of GM and the former Chrysler Group, and because UAW positions are under pressure from the growing number of car plants in Mexico.

The Mexican factories pay workers hourly wages of roughly US$8.25, compared with about US$60, including benefits, for Ford UAW members, according to the Center for Automotive Research in Ann Arbor, Michigan.

Mr Hinrichs said Ford has worked hard to make its US manufacturing operations more efficient.

REUTERS