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Old 08-22-2005, 07:45   #1 (permalink)
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Canada:Ford casts a shadow over Windsor plant

Ford casts a shadow over Windsor plant

Essex said bypassed on SUV engine jobs

By GREG KEENAN

From Monday's Globe and Mail

The dark cloud hanging over Ford Motor Co.'s Essex engine plant in Windsor, Ont., is growing darker -- just as the auto maker warns that more plant closings in North America are on the way.

The Essex plant will not be the source of engines for two new sport utility vehicles to be built in Oakville, Ont., industry sources say, a move that leaves the Windsor facility with no engines to produce, once minivan output in Oakville is phased out later in the decade.

A Ford plant in Cleveland will turn out the engines for the new Ford Edge and Lincoln Aviator SUVs that will be built in Oakville, the sources said.

That leaves Essex high and dry, and about 1,600 jobs at risk because workers there make V6 engines for the Ford Freestar and Mercury Monterey minivans. The minivans, which now are built at the Oakville Assembly Plant, are being replaced later in the decade with so-called people haulers made in Atlanta.

There was a glimmer of good news for the plant last week when Oakville-based Ford Motor Co. of Canada Ltd. scaled back the number of layoffs among people who make V8 engines at the Essex plant. But about 70 people will be laid off today, bringing the number of layoffs of Ford Canada employees in Windsor to about 500. About 180 people lost their jobs last Monday.

The future of the Essex plant, part of Ford's massive engine-building complex in Windsor that includes another engine plant and facilities making blocks and other engine parts, will be a key issue in its contract negotiations this fall with the Canadian Auto Workers union.

"It's our No. 1 priority," said Mike Vince, who is head of CAW Local 200, which represents workers at Ford's operations in Windsor, and is also vice-chairman of the union's negotiating team.

The Essex engine plant is already operating at less than full capacity, in part because the Oakville assembly plant where its engines go has been reduced to one shift a day from the usual two amid dreadful sales of the Freestar and Monterey.

Sales of the Freestar in the U.S. market plunged 37 per cent from year-earlier levels in July, a month when the auto maker was offering employee discount prices on all its vehicles to all Canadian and U.S. buyers. Overall U.S. sales jumped 30 per cent for Ford. Monterey sales plummeted 71 per cent.

Ford's other Canadian assembly plant in St. Thomas, Ont., is also operating at considerably less than full capacity because of slow sales of the Ford Crown Victoria and Mercury Grand Marquis.

That plant is to shut for two weeks in each of October, November and December, said Whitey MacDonald, chairman of CAW Local 1520 in St. Thomas and head of the union's Ford negotiating team.

He wants Ford to make a long-term pledge to keep the St. Thomas plant open, arguing it has raked in hundreds of millions of dollars in profits from an investment made more than a decade ago.

There is at least one bright spot on the horizon at Ford Canada: a $1-billion redevelopment of the Oakville plant to build the two new SUVs beginning next year.

But signals about more factory closings have grown stronger out of Ford headquarters in Dearborn, Mich., in recent weeks.

"We're not downsizing temporarily with the hope that conditions will get better," company chairman and chief executive officer Bill Ford said in a memo to employees earlier this month, according to wire-service reports.

The subject of the memo was firings of salaried employees as Ford slashes its white-collar work force by 1,700 jobs -- or 5 per cent -- on top of a reduction of 1,000 salaried jobs earlier this year.

Analysts point to St. Thomas and a plant in Wixom, Mich., just outside Detroit, as leading contenders to be closed.

"It's not something that's new to us," Mr. MacDonald said of the threat to St. Thomas.

Ford undertook a restructuring program in 2002 that included more than 20,000 job cuts and the closing of the Ontario Truck Plant, which now sits empty next to the Oakville Assembly Plant.

But any new job cuts or plant closings in Canada could give the auto maker a problem with the federal and Ontario governments, which will provide a combined $200-million for Ford's new Oakville assembly complex, set to replace the two existing plants.

The agreements with the governments require that Ford's hourly work force in Canada be a minimum of 10,000 people, or the governments can claw back money from Ford, sources familiar with the deal said.

Its current hourly work force is about 12,000, which means closing the Essex plant alone would push the company close to the 10,000 level. Eliminating the 2,400 jobs in St. Thomas would reduce employment below 10,000 people.

Ford Canada officials would not discuss the government agreements or future product programs at Essex or St. Thomas.

"We don't discuss future product programs or sourcing matters," said Ford Canada spokesman John Arnone. "To discuss specifics during the negotiations would be inappropriate."

The company has also never discussed publicly which vehicles will be assembled in Oakville when the redevelopment is complete, saying only that the plant will be capable of producing several vehicles off two different platforms or basic body underpinnings.

Mr. Vince, the CAW leader in Windsor, said the company has not discussed with the union which engine plant will make the engines for the new SUVs to be assembled in Oakville.

Any talks on the future of the Essex plant, he said, will include the union's recognition that times have changed, and there are new ways of doing business in the auto industry. "It's a much tighter market. The company has lost market share."
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