Saturday, June 24, 2000

Batavia plant caught up in a world of change

By Mike Boyer
The Cincinnati Enquirer

        BATAVIA — From the outside, little appears to have changed at the sprawling former Ford Motor Co. transmission plant near here.

        The familiar blue Ford oval signs outside the 20-year-old plant have been replaced with a blue ZF circle, reflecting the fact the building is now owned by a joint venture between ZF Friedrichshafen AG, the German auto parts maker, and Ford.

        But inside the 1.8-million-square-foot plant, a world of change is occurring.

        Eighteen months ago, Ford and ZF — which traces its roots to Graf Ferdinand von Zepplin — created a partnership at Batavia (51 percent owned by ZF) to produce a new automatic transmission, called a continuously variable transmission (CVT), for small and medium-size vehicles.

        Unlike the past, when the Batavia plant took direction from Ford and supplied front-wheel-drive transmissions to only it and its affiliates such as Mazda, ZF Batavia is an independent business and needed to develop many of the functions previously supplied by Ford.

        “It's been a major challenge, figuring out how to do all of that locally,” said David Adams, ZF Batavia president.

        The plant has had to develop its own sales force, purchasing and quality control units and financial and accounting departments.

        As an unusual marriage of automaker and auto supplier, Mr. Adams said, “This project is being watched at the highest levels of both companies.”

        Among the changes introduced at ZF Batavia:

        • To produce CVTs for Ford and other automakers starting in 2002, the plant is preparing for a massive capital investment next year approaching three-quarters of a billion dollars.

        The investment in new production machinery to produce CVTs is expected to be one of the largest capital projects in Ohio. In preparation for that investment, a vast area on the east end of the plant has been cleared for the machinery.

        • The plant has already invested $60 million and is producing a beefed up version of a four-speed automatic transmission, called the CD4E, for the new Ford Escape and Mazda Tribute small sport utility vehicles debuting this summer.

        • Reflecting the plant's new ownership, there's a new diversity among its workers. Its work force is an amalgam of Ford workers, new hires by the joint venture and engineers and others brought in by ZF.

        The mix is designed to bring a new corporate culture to ZF Batavia.

        “What we're trying to do here is bring a sense of the world to Batavia,” Mr. Adams said.

        The plant, which employs 1,100, has added about 150 new workers. In an unusual move, Ford allowed Batavia employees to decide whether they wanted to stay with Ford or become part of the new joint venture.

        Many who didn't want to work for the joint venture were allowed to transfer to Ford's Sharonville plant. At the same time, new hourly employees hired by the joint venture are members of the United Auto Workers, like their Ford counterparts. Their labor agreement, while separate, mirrors that between Ford and the UAW, Mr. Adams said.

        “The UAW has been extremely helpful to us,” he said.

        CVTs like those ZF Batavia will begin producing in a couple years have been around for about 20 years, but are getting increased attention in the auto industry because they promise increased fuel economy and better performance.

        Unlike traditional transmissions that use a series of gears to transmit the engine's power to the wheels, CVTs use two variable diameter pulleys that continuously adapt to road conditions without gear shifts.

        CVTs are expected to achieve about 10 percent improvement in fuel economy, an important consideration for Ford and other automakers as they work to achieve government-ordered Corporate Average Fuel Economy, or CAFE, targets.

        They could also be attractive to car buyers too, if gasoline continues to hover around $2 a gallon.

        “If these (gas) prices continue we won't be able to build enough (CVTs),” Mr. Adams said.

        As it is, ZF Batavia expects to eventually produce about 1.2 million CVTs annually from the plant, about four times the plant's annual production of about 300,000 units.

        Achieving that production will mean more jobs at Batavia, but Mr. Adams cautions that employment won't increase by the same magnitude as production because CVTs contain fewer parts and thus less labor than the plant's current front-wheel-drive transmissions.

        CVTs are produced now by Honda and some other automakers in small quantities, but the key to ZF Batavia's success will be reaching high production volumes quickly to justify the massive capital investment required, Mr. Adams said. To do that, he said, the plant will add production capacity in small increments. Initially, it will produce about 250,000 CVTs annually.

        “We'll run this facility with a great degree of flexibility to produce a broad spectrum of products,” he said.

        Before the CVTs come on line, ZF Batavia is the sole source for the beefed-up CD4E transmission which will be used on both four-cylinder and V-6 versions of the Ford Escape and Mazda Tribute SUVs debuting in September.

        Batavia has produced the front-wheel drive CD4E for the Ford Contour and Mercury Mystique, Mazda 626 and Ford's European-built Mondeo since those vehicles were introduced. But Ford is phasing out the Contour and Mystique. It stopped assemblying those vehicles at its Kansas City, Mo., assembly plant in January, so the plant could retool to build the Escape.

        Stanley F. Meyer, a Ford product planning manager who is now director of sales and planning and ZF Batavia, said when Ford and Mazda, which is partially owned by Ford, began planning a new small SUV about three years ago, Mazda proposed building the transmission at one of its plants in Japan.

        Engineers at Batavia, which wanted to retain the Kansas City plant as a customer, developed improvements to the CD4E such as a new differential and the capability to be used on either front-wheel- or four-wheel-drive vehicles to make it compatible with the new SUV.

        “Because of the improvements proposed here and exchange rates and other economic issues, this facility basically got the business,” Mr. Meyer said.

        Production volume for the Escape and Tribute is critical to the Batavia plant because without it there wouldn't be sufficient CD4E volume to support the plant's operations until the CVT production begins.

        Batavia began producing the transmissions for the Escape and Tribute in November. The plant has been operating one shift, producing about 800 units a day since then, but will go to two shifts, producing twice that number when the plant returns from its two-week summer shutdown in mid-July.


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