US:Analyst: Wixom safe,Automaker will shutter 4 plants
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Analyst: Wixom safe
Automaker will shutter 4 plants, but Michigan factory isn't on downsizing list, Global Insight says.
Bryce G. Hoffman / The Detroit News
Ford Motor Co. plans to announce the closure of at least four assembly plants Monday, according to a respected industry analysis firm, but Michigan's Wixom Assembly Plant will not be one of them.
With the struggling automaker preparing to reveal the details of its "Way Forward" restructuring plan Monday, Global Insight Inc. of Waltham, Mass., will outline its analysis of Ford's plan today during a Webcast.
Analyst Catherine Madden said based on Global Insights' research and its industry contacts, Ford plans to close its assembly plants in Atlanta; St. Louis, Mo.; St. Paul, Minn.; and Cuatitlan, Mexico. A number of smaller parts factories could also be closed or put up for sale.
Ford would not comment on Madden's analysis or provide any details of its restructuring plan.
The Detroit News reported in December that Ford's restructuring plan calls for shuttering at least 10 assembly and parts factories and cutting at least 25,000 jobs in North America over the next five years, according to people familiar with the plan.
Ford has said it plans to eliminate about 4,000 white collar positions by the end of March.
The fate of Wixom Assembly has been up in the air since Ford killed the Thunderbird last year and said future Lincolns would be built at the Atlanta Assembly Plant in Hapeville, Ga. Now, it appears the tables have turned in Michigan's favor.
While both states have been offering Ford an array of incentives to keep their respective plants open, Madden said Georgia has effectively halted its lobbying effort.
"In the last couple of weeks, that's tapered off," she said.
Georgia officials confirmed that they are no longer actively negotiating with Ford, though they said they remain hopeful.
"There's no reason to negotiate in this period right now," said Bert Brantley, a spokesman for the Georgia Department of Economic Development. "Ford is dealing with bigger issues than Georgia."
Hapeville Mayor Alan Hallman had been confident that Ford would remain part of his community until December, when he was notified that the plant had been placed on a list of factories being evaluated for closure as part of Ford's plan.
"Up until then, we were extremely optimistic," Hallman said. "We are (still) hopeful that the plant will remain open, but we have certainly been discussing contingency plans."
Meanwhile, Michigan officials are cautiously optimistic.
Mike Shore, vice president of communications for the Michigan Economic Development Corp., said Gov. Jennifer Granholm recently met with Steve Hamp, Ford's chief of staff, to discuss keeping the Wixom plant open. She told Ford it would be eligible for certain incentives for retaining jobs and adding new jobs.
"We're confident in the sense that we have made a strong case," Shore said. "It will be Ford's decision. They know what's in our tool box."
Wixom is one of the largest Ford plants in the world, but it is also one of the most underutilized.
The 4.7 million-square-foot factory can easily accommodate more than 3,000 workers. These days, it only has 1,500 on the books and is down to a single shift -- and most of those workers are currently idled because of lackluster demand for the Lincoln LS and Town Car.
Only a small number of workers that make Ford's top-of-the-line sports car, the Ford GT, are working this week.
"The products they have are dead," Madden said.
Wixom may not have much in the way of current product, but it is one of Ford's more modern facilities and would cost a lot less to upgrade than the Atlanta factory. Wixom also has a more flexible manufacturing system, room to grow and a tough United Auto Workers local that would likely mount a major fight over any closure plan.
Madden said Ford will likely have to shut the Wixom plant down for a period of time to retool it to build new products, including possibly the Lincoln MKS sedan, which is debuting at this year's North American International Auto Show, and a Ford-badged "people mover" based on the Fairlane concept that was unveiled at last year's show.
Gwen Leapheart, a UAW safety coordinator at Wixom, said plant workers were told Tuesday to expect to hear an announcement at 9 a.m. Monday. "I do believe we will be staying open based on what I hear, but that's all speculation," she said.
Paul Brown, who has worked worked at Wixom since 1974, says workers are more optimistic than they were a year ago.
"A lot of people thought the nail was in the coffin," he said.
Recently, though, he said he heard from a plant supervisor that Ford was reconsidering and that Wixom might be spared.
"The chances are better than what they were," he said.
Ford's Twin Cities Assembly Plant in St. Paul is an aging factory that needs more upgrades than Ford can easily afford at this juncture. The Ford Ranger pickup it produces has suffered big saled declines.
Earlier this month, Minnesota Gov. Tim Pawlent led a delegation to Detroit to meet with Ford. "We laid out our entire case," said Kit Borgman of the Minnesota Department of Employment and Economic Development. "They said they would consider it. That's really about all we have at this point."
The governor of Missouri led his own delegation to Detroit a day later, with similar results.
The St. Louis Assembly Plant in Hazelwood, Mo., makes the weak-selling Ford Explorer and Mercury Mountaineer sport utility vehicles -- both of which are also manufactured in Louisville, Ky.
"They already tried to close it once," Madden said. "It's one shift. It easily could be consolidated with Louisville."
Cuatitlan is another low volume plant. "It would require major renovation to boost production," Madden said.
Madden is also putting a question mark over the St. Thomas Assembly Plant in Canada, though she said any move to close that facility is likely several years away.
"A couple of months ago I thought we were safe," Canadian Auto Workers President Buzz Hargrove told The News Tuesday, noting that the CAW had already agreed to close a casting plant in Windsor and phase out Ford's V-6 engine plant in the same city. "Now I am not so sure. I am worried about the announcement."
United Auto Workers President told reporters Tuesday night that any list of plant closures was "total speculation"
According to Harbour Consulting in Troy, Ford used about 86 percent of its plant capacity in North America in 2004.
Jon Rogers, an analyst with Citigroup Investment Research in New York, said in a report Tuesday that Ford needs to reduce its factory capacity by 25 percent to achieve full utilization. He also expects Ford to close St. Louis, Cuatitlan, and either Wixom or Atlanta. However, Rogers said Michigan Truck Assembly in Wayne also could be on the block.
"Nothing is 100 percent," Madden stressed, though Ford Americas President Mark Fields said last week that his restructuring plan has been approved by Ford's board.
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My next Ford.....