FORD'S $500 MILLION INVESTMENT IN INDIA PAYING OFF AS PLANT READIES FOR PRODUCTION OF NEW SMALL CAR

Ford India New Overhead Conveyor

• Ford India's integrated manufacturing plant near Chennai is poised to begin volume production of a soon-to-be-introduced new small car after undergoing significant transformation with a $500-million investment to become a strategic global production hub.
• The facility will be the first Ford volume car plant globally to introduce a new premium paint process that will also be a first for India. Called Three-Wet High-Solids, the process delivers a glossy, high-quality, more durable finish that's more eco-friendly to produce.
• New stamping, flexible body shop and assembly line systems with cutting-edge automation are highlights of the expansion, which doubles annual production capacity to 200,000.
• New 100-acre vehicle testing facility with 3.2-kilometre circuit simulating Indian road conditions.
• A further expansion phase, for a new integrated manufacturing facility for diesel engines, continues to progress. With a capacity of 250,000 engines a year, it is due on line in 2010.

CHENNAI, India, Sept. 3, 2009 – Ford's integrated manufacturing facility near Chennai is readying for volume production of its soon-to-be-introduced new car after a comprehensive transformation to double its capacity and become a strategic production hub for Ford Motor Company.

Attracting an investment of $500 million from Ford Motor Company, the Ford India plant, located in Maraimalai Nagar, was selected as the ideal production source for Ford's new car. It will be produced not only for India but also for export to other international markets.

With cutting-edge automation and high-tech new facilities, the new site reflects the latest Ford manufacturing processes globally and pioneers new technologies for Ford and India. Created with a "best of the best" approach, the Chennai plant has been benchmarked against other competitive facilities globally, as well as the current volume manufacturers in the Indian market, for quality and production efficiency.

"India's long-term significance in our strategy for this region is readily evident with the completion of this new plant," said John Parker, executive vice president, Asia Pacific and Africa, Ford Motor Company. "We've committed in total more than $950 million in recent years to make India one of Ford's strategic production hubs. It's a strategy built on creating great products whose appeal will reach beyond India's borders, and it's fully in line with our business objective to create volume-production centres of excellence in this region."

The expansion marks a major shift for the plant, which has successfully been producing Ford models solely for the India market, including the Ford Ikon, Ford Fiesta, Ford Fusion and Ford Endeavour. With its forthcoming new car, Ford is targeting the heart of the Indian car market and expanding its production capacities accordingly – with output potential of 200,000 vehicles annually.

"This new world-class manufacturing facility is a symbol of Ford's commitment to India and our intention to compete with the best in the market," said Michael Boneham, president and managing director, Ford India. "When the first new car rolls off the line, it will be a moment when Ford achieves its potential as a major player in the Indian automotive industry."

Geared to Global Quality and Efficiency
With its expansion and transformation, the Maraimalai Nagar plant is now geared to achieve production efficiency and quality ranking with the world's best. This is important for consumers, who expect high-quality products which are price-competitive with major Indian brands.

"This is a huge conversion that brings together all the lessons we've learned in the Indian market, and best practices from Ford and our competitors," said Tom Chackalackal, vice president, Manufacturing, Ford India. "It will make us very competitive with Indian manufacturers and gives Indian customers a better product than ever. Much of our investment is centred on quality and our desire to be the best in class in India."

The quality product story for Maraimalai Nagar starts with the plant's higher levels of automation – essential for ramped-up production volumes, precision build quality, flexible manufacturing capability and worker safety.

Until its transformation, the plant was designed for manual assembly methods. It was essential, for both world-class quality and volume production, to increase the level of automation especially for major operations in body construction and painting to deliver consistent quality vehicle after vehicle. The expansion brings 92 sophisticated robots into key areas of the plant to handle repetitive tasks with high degrees of accuracy and precision.

New robotic installations include:

• A total of 16 new painting robots for the plant's new Three-Wet High-Solids painting system. These robots apply the coats of paint successively – four for the primer coat, eight for the base coat and four for the clear coat – with even precision in up to 11 colours.
• Underbody sealer application – for speed and precision.
• Underbody welding robots and body framing systems with flexibility to handle different-sized vehicles with extremely high levels of precision and weld quality.
• Robotic door hemming – another quality measure.

Putting a Shine on Quality
Ford's no-compromise approach to delivering high-quality for progressive yet value-oriented customers mandated a significant investment to introduce a high-tech new paint process for Chennai. It brings new levels of finish quality, depth and durability and makes Chennai Ford's first global car plant to introduce the technology. It's also a first for India.

Called Three-Wet High-Solids, the eco-friendly process produces beautifully painted vehicles with three wet coats – primer, base coat and clear coat – of high solids-content paint applied one after the other. Because it eliminates oven curing between coats, the process produces fewer carbon dioxide emissions and reduces volatile organic compounds emissions by about 20 percent compared to current medium-solids solvent-borne paints.

This makes the newly expanded Indian plant the pioneer for a premium-quality paint process that might normally be expected to debut on a luxury car. Its high-solids content results in a paint finish with high levels of gloss and depth of colour, plus it is more resistant to scratches.

The process will also be used for volume production in Chennai beyond the new car. The new technology brings with it other important benefits, too.

"The biggest user of energy and fuel in a manufacturing plant is the paint shop," Chackalackal said. "By introducing this new technology, we're cutting energy use and fuel consumption significantly, and that's good for the environment and the community."

Other major new developments at Chennai include:

• New stamping press line and automated crossbar technology to double the plant's metal pressing capacity for body panels.
• New flexible body shop capable of producing Ford India's different cars simultaneously. It has been "future engineered" with the flexibility to accommodate other vehicle types, as well.
• Extension of the trim and final assembly line for flexible assembly capability, taking advantage of centralised bulk material feeding, in-sequence feeding of key supplier components and the delivery of engines via overhead conveyors. The new assembly line raises the plant capacity from 14 to 34 vehicles per hour.
• A major investment in quality assurance with the establishment of the new, 3.2-kilometre test circuit to verify quality before vehicles are shipped, a squeak-and-rattle testing track for finished vehicles, a dynamic water-wading testbed and a four-post hydro-lifter for extreme road-condition simulation testing.
• Enlargement of the plant footprint from 250 to 353 acres, approximately 60 percent of which is built-up area and the remaining acreage is comprised of lawns and green belt. The redevelopment included construction of a new zero-discharge wastewater treatment facility for the plant complex.

"We're passionate about Ford competing in the heart of the Indian car market and delivering on our brand promise," Boneham said. "Our investment in the Chennai plant is set to enable us to create products that will compete with the recognised market leaders and be attractive in other international markets. That puts our Chennai facility in an entirely different league."

Regional and Business Impact
When its major transformation is complete – a new fully integrated, high-volume engine manufacturing facility comes on stream in the near future as the final phase of the Ford investment plan – Ford will have added hundreds to its local employment base.

But the economic impact of the plant extends well beyond its direct employment with indirect employment benefits for the Chennai region. Ford predicts new jobs in the thousands will be created regionally due to Ford's efforts to expand its supplier base with 30 new suppliers in the Chennai area.

The new plant features an enlarged supplier park, and even more raw materials and components than ever are being sourced locally. According to Ford India, up to 85 percent of parts supplies for the new car will be derived from India.

Getting Leaner
The transformed Maraimalai Nagar Ford plant is built around an array of new lean manufacturing techniques to make it ultra-efficient and its products cost-competitive even in the hotly contested sub-B segment in India and other growth markets.

Technology-enabled by multiple computer systems, this lean manufacturing approach enables build-to-order production with parts and components supplied from the new adjacent 30-acre supplier park and other, primarily local, suppliers. Key suppliers are investing in building their own facilities on this land on the plant site.

Through conveyor systems, the plant is geared for production sequence delivery of a greater proportion of supplier component assemblies, like instrument panels, wheel-and-tire units and front-end modules from on-site suppliers.

Unlike previous-generation plants, parts and components for new cars at Chennai take a "lean journey" to assembly – and some parts actually follow the car as it is built to order via a state-of-the-art rolling trolley system. Called 'kitting', this ensures that the parts are available conveniently to production workers but also reduces the chances of installing incorrect parts, thus ensuring a "built right" vehicle.

The plant's upgraded computer infrastructure uses multiple IT systems – including radio frequency identification (RFID) – to manage logistics within the plant facility. This and other technologies are designed to help the plant manage much smaller inventories of commodities and parts and keep them closer to production for easy logistical access and greater production speed. Automated systems and close links with suppliers ensure parts supplies are delivered just-in-time and often in exact production order for each vehicle to be produced.

The plant's site improvements include new truck staging facilities being constructed on the plant grounds to position waiting delivery and transport vehicles off the roadside of the national highway.

Chennai Production Timeline
Ford is already conducting pre-production test building of its new car in the plant facility and will be gearing up in the fourth quarter 2009 toward the start of volume production in the new year.

Construction work has been painstakingly conducted throughout the expansion project to avoid disruption of existing production at the plant. Although that was a key challenge, Ford believed it was the best policy to redevelop its existing plant complex rather than building a "green field" plant requiring additional land.

Ford has yet to reveal details about the new small car to debut as the expanded plant's first new product.

"The wait is almost over," Boneham said. "We are on target and this is a quantum leap for Ford India."

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About Ford Motor Company
Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles across six continents. With about 201,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford's products, please visit www.ford.com.

About Ford India
Established in 1995, Ford India is a wholly owned subsidiary of Ford Motor Company, a global automotive industry leader. Ford India manufactures and distributes automobiles made at its modern integrated manufacturing facility, at Maraimalai Nagar, near Chennai. With more than 2300 employees, the company's models include the Ikon, Fusion, Endeavour and the Fiesta. For more information, visit www.india.ford.com.