NEW YORK (TheStreet) -- Ford (F) - Get Ford Motor Company Report is signaling that it might build a new Ranger midsize truck in the U.S. if it can strike a bargain with the United Auto Workers union, with which it is in contract talks.
Ford declined to say anything officially, given the sensitivity of the talks, though local and trade newspapers in Detroit said the automaker is considering its Wayne, Mich., assembly plan as the site of production.
The assembly plant will have space as of 2018, when the automaker has said it will transfer its Focus EV and C-Max production to a new location, probably Mexico, meaning a loss of UAW jobs. If Ford and the union can agree on terms, it would pave the way for another entry in a vehicle segment that lately has become more competitive and popular.
"It's hard to believe the world's largest truck maker would leave an entire truck category to its competitors in the U.S.," said Karl Brauer, an analyst for Kbb.com. "Despite Ford's initial doubts about General Motors Co. (GM) - Get General Motors Company (GM) Reportintroducing a lower-profit midsize truck to compete against its full size trucks we know Ford is watching sales of the Canyon and Colorado very closely."
Pickup truck sales, dominated by the full-size segment, represent overarching importance to the financial results of both domestic automakers. In recent months, the equities of both have been clobbered disproportionately to the market. Ford shares are down 17.5% year to date, compared to the Dow Jones Industrial Average, which has fallen 11.4%. GM's stock is down nearly 23% since the beginning of the year.
Ford last sold a Ranger pickup in the U.S. in 2011.
Sales of GM's Chevrolet Colorado and GMC Canyon since their introduction late last year have been strong. Ford does sell Ranger pickups overseas but couldn't import them to the U.S. without having to pay a stiff 25% tariff, which was enacted by the U.S. in the 1950s.
Through July, sales of midsize pickups in the U.S. reached nearly 212,000, a gain of 52% from a year earlier, largely on the strength of Canyon and Colorado sales. While Ford has gained attention and momentum in the full-size pickup segment with the introduction of a new aluminum-body F Series, GM has countered with a strategy of developing two entries that are smaller, lighter and more fuel-efficient than typical full-size models, such as its Chevrolet Silverado and GMC Sierra models.
Earlier this month, Toyota (TM) - Get Toyota Motor Corp. Sponsored ADR Report introduced a next-generation Tacoma midsize pickup, which has been leading the segment in terms of sales but hadn't been substantially redesigned for a decade.
Little has been disclosed about the nature of negotiations between Ford, GM and Fiat Chrysler Automobiles (FCAU) - Get Fiat Chrysler Automobiles N.V. Report and the UAW. The labor contract between the automakers and the union expires on Sept. 14.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.