Thursday, February 5, 2004

ZF sells Batavia stake

By Mike Boyer
The Cincinnati Enquirer

[IMAGE] Samba Ba, a worker for current plant majority owner ZF Group, moves a partly assembled CVT at the Batavia factory on Wednesday.
(Michael E. Keating photo)
BATAVIA - Ford Motor Co. confirmed Wednesday it is reacquiring sole ownership of its Batavia transmission plant as part of a new push to boost car sales and profits.

Ford, which sold 51 percent of the Batavia plant five years ago to German parts maker ZF Friedrichshafen AG, told employees that it was buying back that interest. The plant is gearing up for high-volume production of a new type of transmission called a CVT, or continuously variable transmission.

Unlike traditional transmissions, which use gears to transmit the engine power to the wheels, a CVT uses metal belts or chains that ride on cone-shaped discs to transmit power to the axle. CVTs eliminate the gear-shifting sensation of a traditional transmission and produce 4 to 8 percent better fuel economy, Ford says.

"This is a very important product for Ford because it is going into vehicles that will get the company back on its feet in the car business,'' Dave Szczupak, vice president of Ford's powertrain business, told a media briefing.

The plant, which employs 1,400, is launching production of a CVT. It will be standard equipment on Ford's new Freestyle crossover vehicle; on the new Mercury Montego, introduced Wednesday in Chicago; and on most of Ford's new Five Hundred sedans.

All three vehicles are key to CEO William Clay Ford Jr.'s plan to revitalize Ford's car business and generate $7 billion in pretax profits by 2006. Ford reported net income of $495 million last year after $6.4 billion in losses the previous two years.

The change in ownership will be seamless for the Batavia plant's 1,400 employees. Neither Ford nor ZF would disclose financial terms.

"Tomorrow will be just like yesterday for the employees,'' Szczupak said. But the plant's name will change from ZF Batavia to Batavia Transmission LLC.

Ford also has named Shaun Whitehead, plant manager at its Windsor, Ontario, castings plant, as president and CEO. She succeeds Dave Adams, an employee of ZF who moves to ZF's Florence offices. Whitehead has been a Ford manufacturing manager for 15 years.

Ford and ZF emphasized that their partnership isn't going away. They will continue to work together to develop next-generation CVTs for Ford and other automakers.

Szczupak said the change will allow the plant to focus on producing up to 250,000 of the new CVTs annually, while ZF concentrates on new CVT technology.

Szczpak denied that the launch of CVT production was behind schedule. He said Ford and ZF have been waiting for the right new-vehicle program to launch the transmissions

"We see great potential for the CVT,'' he said, adding that the automaker thinks the transmissions will become common on front-wheel drive vehicles with up to three-liter engines.

"I think this is best for ZF and best for Ford,'' said Gerry Priest, a product launch leader on the CVT production line at Batavia.

Priest, who started working for Ford "when this plant was a cornfield'' retired from Ford last year after 261/2 years and is now working for the joint venture to launch the new product.

"I want to see this business grow,'' he said.

Ford opened the Batavia plant in 1980 to produce front-wheel-drive transmissions.

The new CVT production line at the Batavia plant is more automated, cleaner and better lighted than the west side of the plant, where four-speed automatic transmissions are built for the Ford Escape and Mazda Tribute.

The Batavia plant already has produced about 2,000 smaller CVTs for the diesel-powered Focus C-Max that Ford is selling in Europe. The 1.8 -million-square-foot plant has room to add a second CVT line, if demand picks up.


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