Ford to Revamp Kansas City Plant - Analyst Blog

Ford Motor Co. (F) announced that it will invest $400 million in order to revamp its Kansas City Assembly Plant in Missouri. With this upgrade, the automaker has vowed to retain 3,750 full-time jobs at the plant.

The company also plans to roll out a new vehicle from the plant in early 2013 as it will cease manufacturing the Escape sports utility vehicle later this year or in early 2012. Rumors are around that Ford may build the full-size Transit van at the plant, which are sold in Europe.

The company will shift the production of Escape to its Louisville Assembly Plant in Kentucky. However, the company will continue assembling the Ford F-150 at the Kansas City facility on a separate line.

Ford will receive up to $100 million as tax incentives from the Missouri government for retaining workers at the plant. The size of the incentives will depend on the number of workers being retained and the remuneration paid to them. The tax incentives are applied to certified automotive manufacturers who commit to new investments and job retention in Missouri under the 2010 Missouri Manufacturing Jobs Act.               

Ford, a Zacks #3 Rank (Hold) stock, showed an $1.04 billion improvement in profit to $1.91 billion or 48 cents per share (before special items) in the third quarter of 2010 from $871 million or 26 cents per share (before special items) in the same quarter a year-ago. With this, the automaker outpaced the Zacks Consensus Estimate by 10 cents per share during the quarter.

The increase in profit was fueled by the strength of Ford's new products, consistently better performance at Ford Credit as well as a recovery in the North American automotive market.

Total revenues slipped 4.3% to $29 billion, including revenues generated from Volvo cars in 2009. This compared with the Zacks Consensus Estimate of $28.16 billion. However, excluding revenues from Volvo, sales improved $1.7 billion or 5.6% from the third quarter of 2009.