Media reports that Ford has decided to shut down the Twin Cities Assembly Plant are speculative and probably unfounded, Rob McKenzie, president of UAW Local 879, said Friday.
The Wall Street Journal reported in its morning editions that Ford intends to shut five North American plants, including St. Paul, the only plant that makes the Ford Ranger and Mazda B-Series pickup trucks.
“It sounds to me like they don’t even have the most up-to-date information,” McKenzie said. But noting an armada of television news trucks parked outside his union hall, McKenzie said, “It’s the Wall Street Journal. That’s what made a difference.”
Initial announcements due in January
Ford has made no secret that it intends to reveal a company-wide restructuring plan in January. But McKenzie said sources inside Ford tell him that specific plant closings won’t be announced until after that, possibly weeks later.
January’s announcement, he said, is likely to be “a generic restructuring strategy.”
Gov. Tim Pawlenty said in a statement that he had been in touch personally with Ford executives on Friday. “They assured me no final decisions regarding closure have been made.”
A memo from Ford Vice President Mark Fields ripped the news reports, saying “Our overall plan is not final, and any speculation about what might or might not be in it is just that – pure speculation.”
Nonetheless, the future of Ford’s Twin Cities plant is anything but certain. On one hand, Ford is contractually required to keep the plant open until at least September 2007, when the United Auto Workers’ contract expires. It has other commitments, such as with CP Rail, beyond that, McKenzie said.
But Ranger sales are in a freefall. Ford sold only 156,322 Rangers in 2004, a drop of 53 percent since 2000, when the company sold more than 330,000 of the compact pickup. With one month left in 2005, Ford has sold only 112,524 Rangers, 24 percent below the already low figures of 2004.
Poor sales have resulted in the plant being shut down an average of once every five weeks in the past 15 months, with another three weeks of temporary shutdowns anticipated in the first quarter of 2006, McKenzie said.
Uncertainty swirls around workers
Further, Ford has not said what its plans are for the Ranger beyond 2009, nor has it scheduled a new or different vehicle for production in St. Paul.
All this takes place against the backdrop of what McKenzie calls a “crisis” for domestic automakers. General Motors and Ford not only are losing market share and sales to foreign brands, but are at a competitive disadvantage because of health-care costs, pension obligations and trade policies, he said.
Financial problems at major suppliers such as Delphi and Visteon threaten to collapse wages and benefits in the entire U.S. auto industry. That leaves workers at the St. Paul plant “very apprehensive and concerned,” McKenzie said.
Plant has advantages, obstacles
The plant employs 1,775 hourly workers represented by Local 879, about 150 salaried workers, plus additional workers in areas ranging from the cafeteria and salvage to truck drivers and rail operators.
The St. Paul plant has some clear advantages, McKenzie said, including low-cost hydroelectric power. Its workers produce the highest-quality pickup in its vehicle class (according to J.D. Powers rankings), and have top-tier productivity, efficiency and safety rankings (according Ford’s internal assessments). “The things our people have control over, we do very, very well,” he said.
The St. Paul workers rank high in productivity despite not having the latest, state-of-the-art equipment to work with, McKenzie said. But that’s one of the plant’s disadvantages.
“We’re an older plant. To keep it going, we’re going to need a very big investment.”
Elected officials take initiative
McKenzie said he’s encouraged that Pawlenty, Mayor-elect Chris Coleman, and U.S. Sen. Norm Coleman have taken the initiative in trying to persuade Ford officials to convert the plant to build “the next generation of vehicles” – hybrid vehicles or cars and trucks that run on alternative fuels.
“That helps differentiate us from what other states are trying to do,” McKenzie said.
The three elected officials held a conference call with Ford executives Wednesday. McKenzie hasn’t been involved personally in those discussions, he said, “but I got a pretty good report.”