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Ford sticks to adding 7,000 U.S. jobs, says recovery encouraging

By Ploy Ten Kate

BANGKOK (Reuters) - Ford Motor Co on Thursday stuck to its target of adding 7,000 jobs in the United States over the next two years, saying it sees an economic expansion there and not a double-dip recession.

"In the U.S., we're still seeing economic expansion," Alan Mulally, chief executive of the second-largest U.S. automaker, told a small group of reporters in Bangkok. "We're very encouraged by the recovery even though it is slower than in the past."

Ford had said in January it would add the 7,000 jobs in 2011 and 2012. According to its 2010 annual report, there were 75,000 employees in Ford North America.

Mulally declined to comment on progress in negotiations in the United States with the United Auto Workers union on a new four-year contract.

Reports have indicated the UAW may reach a deal this week.

Asked if workers would get a stronger deal from Ford than General Motors because Ford is healthier, Mulally said he had no further comment.

"But to your point, it really is about the competitiveness and if you look at the history of Ford and UAW, we have a very good track record of working together to improve competitiveness of Ford," he said, declining to comment "out of respect of the negotiation process."

SUSTAINABLE ASIA-PAC GROWTH EYED

Ford, the only U.S. automaker to avoid bankruptcy, would not be slowing its expansion in Asia Pacific, despite slower economic growth in China and India, said Mulally. The 66-year-old CEO was in China earlier this week for the groundbreaking of an engine transmission plant at Ford's venture with Changan Automotive Group.

"In Asia-Pacific overall, even though it slows down, it's pretty substantial growth, even in China. They're thinking of 9 percent (GDP growth forecast) maybe so it's almost like even more sustainable over the long term."

Ford is spending $1.6 billion to build four factories in China where it plans to triple its lineup by offering 15 models by the middle of the decade.

Aggressive expansion of Ford in Asia is part of Mulally's wider plan to boost annual global sales 50 percent to 8 million vehicles by 2015.

Joe Hinrichs, the head of Ford's Asia and Africa operations, said the slowdown in growth that is occurring in China and India has to deal with inflation and it was keeping a close watch on capacity, especially in China.

"We weren't planning for the kind of growth over the next five years in places like China, India that we saw in the previous two years because those were not sustainable levels, you know 32 percent growth in the industry last year in China, for example.

"The kind of 5-10 percent automotive industry growth we've been seeing this year is the kind of number we expect is a more sustainable level of growth."

THAILAND HURDLE

Thailand is home to Ford's largest sales operation in ASEAN, which groups 10 Southeast Asian countries.

Strong demand for its Fiesta small cars helped drive Ford's sales in Thailand up 209 percent in August to 2,676 units, boosting overall sales through the first eight months of this year to 20,514 units, according to the company's website.

But Ford is facing a major hurdle after the new government introduced a tax break for first-time car buyers.

This is restricted to cars with engines of up to 1,500 cc, meaning the Thai-built Fiesta with its 1,600 cc engine is not eligible.

Peter Fleet, president of Ford ASEAN, said he remained optimistic that Ford would be able to persuade the government to adjust the rules so the Fiesta could be included.

Ford, which makes Fiesta, Ranger and Everest models in Thailand, would start manufacturing its Focus early next year as its $450 million plant in eastern Rayong province is almost ready to roll out, Fleet said.

Mulally later met with Thai Prime Minister Yingluck Shinawatra on Thursday afternoon to push for the change. A government official told reporters the government was unrelenting. ($1 = 31.00 Baht)

(Editing by Muralikumar Anantharaman)

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