Ford's Kentucky Production Plans Axed

Ford cancels plans to transfer production of an SUV from Europe to Kentucky amid unfavorable exchange rates for U.S. production.
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NEW YORK (TheStreet) -- Ford (F) - Get Report has canceled plans to transfer production of a small SUV from Europe to Kentucky for exchange-rate reasons, indicating that lowering its U.S. labor costs to globally-competitive levels continues to be a challenge, a Bloomberg report said.

According to Bloomberg, two sources familiar with the situation who wished to remain anonymous said Ford planned to move production of its small Kuga vehicle from Saarlouis, Germany, to Louisville, Ky. to take advantage of the falling dollar and reduce labor costs.

Recently, pressure on the euro has been more pronounced due to renewed worries about the eurozone's financial health.

With the euro weakening, Ford has decided not to pursue the plan, which had been private.

The plan was also connected to labor concessions Ford was seeking last year and that members the United Auto Workers objected to.

Bloomberg reported that sources said Ford planned on exporting up to 80,000 Kugas a year to Europe from the U.S.

Shares of Ford stock have fallen 0.3% to $11.77 in early afternoon trading.

-- Written by Andrea Tse in New York.

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