Ford Motor Co will invest $600 million to overhaul a Kentucky plant to make the next generation of its Escape small SUV, in a sign of the gradual recovery for the U.S. auto industry from its near collapse in 2009.

Ford said on Thursday construction on the plant in Louisville would begin this month and include a new body shop. The plant, scheduled to reopen in late 2011, will add 1,800 autoworkers for a total workforce of about 2,900 working two shifts.

Ford said it would give a peak at what the next-generation Escape will look like at the Detroit auto show in January.

State and local governments have committed as much as $240 million in tax incentives over the next 10 years, mostly for the Louisville plant, Ford said.

Once the plant's second-shift workers are added, Ford will have almost 6,600 employees in Kentucky, said Mark Fields, who heads operations in North America and South America.

Ford says the overhauled plant will be the automaker's most flexible and will be able to build up to six different models at the same time.

Jim Tetreault, Ford's vice present for North American manufacturing, said the new Escape is only the first vehicle to be announced for manufacture at the Louisville plant.

We are building in the flexibility to produce other vehicles at the plant in the future, depending upon volume requirements, customer preferences and other factors that affect vehicle demand, he said.

Aaron Bragman, an analyst with IHS Automotive, said the Louisville plant and its ability to build cars on the same underpinnings used to make the Focus small car will give Ford flexibility to shift production between plants as demand and other factors dictate.

Ford said the plant's workers will come from three sources: transferred workers from other Ford plants, activating laid-off workers and hiring. It did not say how many workers are expected from each category.

Marcey Evans, a Ford spokeswoman, said the need for more workers at the Louisville facility is expected to lead to about 1,000 new hires at its U.S. plants. Some workers will want to transfer to Louisville and the jobs they vacate will have to be filled.

The new hires will make about $14.50 per hour, roughly half as much as most veteran hourly workers represented by the United Auto Workers union. The lower wage was negotiated in 2007 between U.S. automakers and the UAW.

The last Explorer made in Louisville will roll off the line at the 55-year-old plant next Thursday and construction will begin, said Evans. About 200 Louisville plant workers, mainly skilled laborers, will work to gut the plant and assist in its overhaul.

That will leave about 900 workers laid off from next week until sometime next fall when training begins on assembling the new Escape, Evans said. Laid-off Louisville workers will gross about 95 percent of their current take-home pay from unemployment benefits and Ford supplemental pay.


Ford's plant near Kansas City, Missouri currently builds the Escape and will continue to do so until the next-generation Escape production begins at Louisville, Evans said.

The Missouri plant will get a new product based on a truck platform, but Evans would not say which vehicle might be assembled there. The Missouri plant now has three shifts of workers on the line that builds the Escape and one shift on the line that builds the best-selling F-150 pickup truck.

The plant near Kansas City employees about 3,700.

(Reporting by Bernie Woodall; editing by Lisa Von Ahn, Matthew Lewis, John Wallace and Andre Grenon)