American automakers are responding to the changing climate in consumer demand and taking advantage of government incentives by trading in the manufacturing of SUVs for electric and hybrid vehicles.

The recent decision by Ford to transform three American light truck plants into small vehicle factories reflects Ford's recognition that times are a changing.

Ford’s has invested $550 million investment to retool a plant in Michigan that once produced bulky Expeditions and Navigators to produce the all-electric Focus in 2011 as well as Focus hybrids. The all-electric Focus is being developed with partner Magna International, and will be able to be charged through a 110- or 220-volt outlet. Next year in collaboration with Smith Electric, the manufacturer will produce a Transit Connect battery electric commercial van, which provides much more transport room than other hybrid options.

The automotive company will be launching this change by transforming the Michigan Truck Plant, a large SUV factory, into the Michigan Assembly Plant, which will produce small vehicles by 2010. The conversion is expected to result in 3,200 jobs, and additional government tax incentives could encourage even further job growth in the state.

One of the new features of the plant is the implementation of flexible manufacturing, which allows workers to evaluate plant installations through a virtual system. Ford will be converting two other truck and SUV plants to focus on cars— first in Mexico where new Fiestas will begin production next year, and at Louisville Assembly in 2011 which will produce the all-electric Ford Focus.

Michigan, Wayne County and the city of Wayne contributed over $160 million toward Ford’s changes. (The company posted net losses of $1.4B in their first quarter this year.) The plant in Michigan will also be designated as the state’s first automotive technology anchor site, which will open up additional tax incentives for suppliers.

President of the Americas at Ford, Mark Fields, said that they are changing their company focus from trucks and SUVs to a company with a “balanced product lineup… [including] even more high-quality, fuel-efficient small cars, hybrids and all electric vehicles.” Ford announced that in 2012 it will produce plug-in hybrid vehicles.

SUV purchases, in some consumer cases, have historically been the product of perceived safety improvements. Increased numbers of SUVs on the road has caused drivers to grow more concerned for their safety in smaller cars, bringing further popularity, which has slowed to date from a surge in the last decade. As more smaller hybrids and electric cars fill interstates, hopefully the perceived need to be riding in the biggest truck you can afford will be reduced.