New Fiesta Production Will Be In Germany

Ford and the local Works Council agreed to work rules that will improve productivity and save at least $400 million a year through 2021

Ford will build its next-generation Fiesta exclusively in Cologne, Germany for European consumers after workers approved a new flexible union agreement.

Ford and the local Works Council agreed to work rules that will improve productivity and save at least $400 million a year through 2021. The deal also provides job security for about 24,000 employees, in part by in-sourcing some work now done by suppliers.

The Cologne assembly plant will run on two shifts while a third shift will be added at the Cologne engine plant where Ford makes a 1-liter, three-cylinder EcoBoost engine. Shifts can be added or dropped depending on sales.

"Now, this new level of flexibility allows us to optimize production and build in a much more efficient manner," said Barb Samardzich, chief operating officer, Ford of Europe.

Ford is also adding 500 engineers in Cologne to focus on global small car product development.

"This agreement and our decision to build the next-generation Ford Fiesta in Cologne marks another important step in Ford of Europe's transformation and underscores our commitment to invest in competitive vehicle production in Germany," said Stephen Odell, president of Ford of Europe. "We were able to negotiate collaboratively with the Work Council leadership to reach new levels of competitiveness in Cologne to match the plant's already proven track record for quality and productivity."

The automaker plans to launch at least 25 new models in Europe over five years. It has closed its plant in Genk, Belgium and two operations in the U.K. last year to cut annual costs by $450-500 million. The automaker is on track to return to profitability in the region next year. Ford lost $1.6-billion in Europe in 2013.

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