Ford is spending $600m to transform its Louisville Assembly Plant into a modern, flexible facility to build the next Escape for North America from late next year.

The plant is the third North American body-on-frame truck plant the automaker is re-tooling to enable production of fuel-efficient products from its global vehicle platforms. Louisville built the larger Explorer SUV from 1989 but production of the redesigned 2011 model was moved to Chicago.

US speculation is centring around whether the automaker, under its one Ford policy which has already spawned all-but-identical Fiesta and Focus models for global sale, including North America, will replace both the Escape and European Kuga with one model or simply share the platform and use a different body for North America.

Ford said it would "signal its future direction for the next-generation Escape through a concept vehicle" at the Detroit show in January.

When Louisville restarts production in 2011, it will operate on two shifts with approximately 2,900 employees - up from today's one shift and approximately 1,100 employees. The 1,800 additional jobs are expected to be filled through a combination of transferring employees from other facilities, re-activating workers on indefinite layoff at the time of launch and hiring new workers.

Later in the year, the plant reopens with tooling and facility upgrades in its final assembly area and body shop. Reprogrammable tooling in the body shop will allow the plant to produce multiple vehicle models at the same time without requiring downtime for tooling changeover - it the company's most flexible high-volume plant in the world.

Louisville will then be able to build up to six different vehicles at the same time, allowing Ford to meet demand more quickly in the event of potential shifting customer preferences dictated by changing economic conditions.

"Manufacturing flexibility is a key to competitiveness, and we are continually exploring ways to raise the bar in this critical area of the business," said Jim Tetreault, Ford's vice president of North America Manufacturing. "While we are launching Louisville Assembly Plant with one key product - the next-generation Escape - we are building in the flexibility to produce other vehicles at the plant in the future, depending upon volume requirements, customer preferences and other factors that affect vehicle demand."

Ford's state and local partners have committed up to US$240m in tax incentives during the next 10 years, based on current and potential future investments and job creation at the company's two Kentucky facilities.

Kentucky's incentives are based upon an initial combined Ford investment at both facilities of about $800m - the $600 million for Louisville transformation and the previously invested $200m for accommodating Expedition and Lincoln Navigator production at the Kentucky truck plant. The incentive also allows for additional investment in the future.

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