CHICAGO | Four years ago, Ford pumped $400 million into its oldest continuously operated factory, which at one time made Model Ts, so it could produce the next-generation Explorer.
The investment helped triple employment at the Chicago Assembly Plant, which has been cranking out cars along the Calumet River in Hegewisch since Calvin Coolidge was president and a quart of milk cost 14 cents.
The decision paid off. Explorer sales have been soaring, and hit their highest level last month since July 2005. In May, Ford sold 20,346 Explorer sport utility vehicles, a 20.7 percent increase over 2013.
"It's the third year since the retooled Explorer was launched and demand has grown and grown," Ford spokesman Chris Preuss said. "That's an anomaly. It tends to slow down as it ages."
Ford is looking to ramp up production of the Explorer, which is exported to more than 60 countries across the globe. The automaker is working with suppliers to boost their capacity and shifting production at the Chicago Assembly Plant, which also makes the Taurus, the Lincoln MKS and Police Interceptor versions of the Taurus and the Explorer. The factory has been running at full capacity for more than a year, and has shortened summer breaks and hired tag relief workers to keep the assembly line running during coffee breaks.
"We sell all the Explorers we can make," said Joe Hinrichs, executive vice president and president of the Americas at Ford. "It's a good problem to have."
The overall sport utility vehicle segment is doing well, and the Explorer has been particularly successful because of its strong reputation for capability, quality and fuel efficiency, Hinrichs said. Families like the size, the flexibility of the space and how well it handles winter conditions.
Fuel-sipping compact cars also are hot. But consumers are gravitating either to smaller cars or bigger pickup trucks and sport utility vehicles. The large car segment has been shrinking, Hinrichs said.
Taurus sales dipped 7.6 percent to 6,020 in May, and are down 18.1 percent for the year. Such slumping numbers could have been bad news for the Chicago Assembly Plant a decade ago, when Ford still made only one or two vehicles at each plant. But the company has switched to a new setup where each factory produces several different models, allowing them to quickly adapt to the marketplace.
If Explorers are selling and Tauruses are not, the plant makes more Explorers and fewer Tauruses.
"We're remixing a little bit as a percentage to make more Explorers," Hinrichs said. "When we closed plants, we filled up the remaining ones so they were not making just one product. We kept the plants running at all times and fully utilize the people and equipment instead of having some plants on one shift and others on two shifts. As a result, we have a better cost base, and it's a more efficient use of our capital."
In 2010, the sprawling 2.8 million-square-foot Chicago Assembly Plant at Torrence Avenue and 130th Street on the South Side made only sedans. But the workforce has swollen from 1,200 pre-Explorer to 4,100 today. Ford has been running three shifts and keeping the assembly line going more than 20 hours a day to keep up with demand.
Explorer sales exceeded Ford's initial expectations, and the supplier capacity that was set up for the SUV when its production was first moved to Chicago. Ford has been working with suppliers, such as Hammond's Lear Corp., to increase their capacity to feed the plant with parts. Line speeds can be increased to boost production if the supplier network can step up.
"We need to build more Explorers," Hinrichs said. "We need as many as we can get."
Ford also is seeing robust sales of its Chicago-made Police Interceptors, which have captured about 50 percent of the market share for police cars. Police Interceptor Sedans increased by 27.8 percent in May, and Police Interceptor Utility sales soared by 98.3 percent.
Sales of the Interceptor utility vehicles, which are souped-up Explorers, have risen by 58.7 percent so far this year.
"Chicago is very import part of Ford's assembly plant portfolio," Hinrichs said. "It makes a number of important vehicles."