US:Ford's plunging SUV sales leave workers scared
Ford's plunging SUV sales leave workers scared
Cost-cutting plan expected Monday
BY SARAH A. WEBSTER
DETROIT FREE PRESS BUSINESS WRITER
Ford Motor Co. workers at Michigan Truck in Wayne and Louisville Assembly in Kentucky are growing increasingly worried that their SUV plants will be targeted Monday to lose a shift or maybe even close.
"I'm not secure," Rocky Comito, president of UAW Local 862 in Louisville, where the Ford Explorer and Mercury Mountaineer are built, said Wednesday.
"It's up in the air for us," said Mark Rose, who has spent a decade working on the assembly line at Michigan Truck, where the Ford Expedition and Lincoln Navigator are built.
Their concerns are surprising because neither of those sport-utility plants has been mentioned by experts as a top candidate for cutbacks or closures as part of Ford's Way Forward cost-cutting plan, which is slated to be released four days from now.
But workers at the two plants report they aren't being used efficiently and they expect changes in light of plummeting SUV sales.
Tens of thousands of anxious union workers, who have been subject to rumor and speculation for months now, are planning to gather in plants across the country Monday morning to learn the fate of their facilities through a telecast out of Dearborn.
Ford, which made $1.9 billion through the first nine months of 2005, is slated to release its full-year financial results Monday and disclose its Way Forward restructuring plan. The company has refused to comment on which plants might close or how many workers will lose their jobs, causing anxiety to mount.
Between 1999 and 2004, Ford eliminated 39,686 employees worldwide, ending 2004 with 324,864 workers. So Ford could cut about that many people or more between now and 2010.
Analysts expect Ford to close four or five of its 19 assembly plants in North America as well as several plants that build parts. While there is disagreement among the experts, most of the attention has focused on assembly plants in Wixom; St. Louis; St. Paul, Minn.; Atlanta, and Cuautitlan, Mexico.
But only one of those plants -- St. Louis -- builds SUVs, which have been one of Ford's weakest spots lately.
Last year, overall SUV sales in the United States were off 10.2%. But they were down 25.5% for Ford's truck-based SUVs. That equates to 168,000 lost SUV sales -- about a whole assembly plant full.
So that leaves workers at Michigan Truck, which employs 3,100 workers, and at Louisville, which employs 3,380, wondering whether Ford will eliminate even more capacity to build increasingly unpopular SUVs.
Sales last year were down 28.6% for the Expedition, 29.0% for the Navigator, 29.3% for the Explorer and 26.0% for the Mountaineer. And workers at the plants that build those SUVs reported more than 10 weeks of downtime in the past year, making them far from efficient.
If Ford eliminates the SUV plant in St. Louis, that may help bring the automaker in line with today's demand. But Ford may need to cut even more to get in line with tomorrow's sinking SUV demand -- or find another use for the plants that build those vehicles.
"If we lose another 100,000 SUVs next year, then where are we?" asked Comito.
At Michigan Truck, UAW Local 900 official Emanuela Henderson declined to comment on the future of the plant.
Gary Shelp, who has worked at Michigan Truck for 10 years, said he feels that some changes could be coming to the plant, although he's not certain what they would be. The facility does have some new, flexible equipment, but he said he doesn't think Ford's truck capacity is being used as efficiently as it should be.
"A lot of people feel the SUV market is so saturated," he said. "We do need to supplement with a different type of vehicle."
Plant worker Rose said it wouldn't surprise him if Ford cut more SUV production or reorganized it within the existing assembly plants. He said his plant was idle 16 weeks last year, and he said he thinks Ford might move some production at Michigan Truck, which opened in 1957, to Dearborn Truck, which opened in 2004.
The company's crown jewel manufacturing plant -- the environmentally friendly, highly flexible Dearborn Truck facility at the Rouge Complex -- sits idle under its 454,000-square-foot green grass roof a lot of the time.
The plant used only 64% of its capacity in 2004, according to Harbour Consulting in Troy. Visitors to the plant, which is part of the Ford Rouge Factory Tour at the Henry Ford, rarely get to see F150s being built there on the weekends.
When an automaker's plant doesn't produce all the vehicles or parts it can, the plant equipment is not being used efficiently and isn't paying for itself. It's the equivalent of an employer paying workers full-time pay for part-time work.
Ford has more than 49,000 workers in 19 assembly, eight stamping, 10 powertrain and five casting plants in North America. But with declining demand for its vehicles, Ford used just about 86% of its plant capacity in 2004, according to the Harbour Report, the annual study of automotive manufacturing performance by Harbour Consulting.
Most automakers aim to use 90% or more of their capacity.
Asked whether Gov. Jennifer Granholm or other state officials have discussed the fate of the Michigan Truck plant with Ford officials, Granholm press secretary Liz Boyd said Wednesday, "The governor has made a pitch to keep every Ford job in Michigan."
After Granholm met with Ford executives Jan. 11, she told the Free Press that she was concerned about the fate of Ford's Wixom assembly plant. Boyd said she wasn't aware of any specific discussions concerning other plants, including Michigan Truck.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....