Ford Pondering Moving Euro Market Kuga Production To Kentucky

Ford Motor Co. is moving production of a small sport-utility vehicle from Europe to the U.S. to take advantage of lower labor costs and the weaker dollar, according to three people familiar with the plan.

Ford in October 2011 will shift the Kuga model to Louisville, Kentucky, from a factory in Saarlouis, Germany, said the people, who asked not to be identified because the plan is private. As many as 80,000 a year will be exported to Europe, one of the people said. The dollar has fallen 18 percent against the euro this year, lowering the cost of U.S.-made goods.

“This makes sense because western Europe is not a particularly cheap place to make cars,” said Barclays Capital auto analyst Brian Johnson, who estimates Ford’s labor costs in the U.S. could be $10 an hour lower than in Germany. Johnson, based in Chicago, rates Ford “equal weight.” “Building a car with European specifications on a U.S. assembly line also shows the benefits of having common vehicle platforms.”


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