Ford Agrees to Keep Fiesta Production in Germany

Ford Motor Co. says it will build its next-generation Fiesta small car in Cologne, Germany, after reaching a deal with its works council there on flexible work rules and other efficiency measures.

The company reportedly was considering moving Fiesta production to its lower-cost B-Max minivan plant in Craiova, Romania.

The new labor accord in Germany will be in effect between 2017 and 2021. Ford estimates the deal will save at least €295 million ($400 million).

Under the agreement, Ford will move to a two-shift assembly operation at Cologne. It also will add a third shift at the facility's adjoining engine plant to increase output of 1.0-liter 3-cylinder engines.

Separately, Ford says it will add 500 permanent engineering jobs by the end of 2014 at its engineering center in Cologne.