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Old 05-07-2006, 06:01   #1 (permalink)
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US:Virginia governor: Ford firm on Norfolk plant's closing

Virginia governor: Ford firm on Norfolk plant's closing

Stephanie Stoughton / AP Business Writer

RICHMOND, Va. -- After meeting Friday with Ford Motor Co. executives, Gov. Timothy M. Kaine held out little hope that the nation's No. 2 automaker would retain its Norfolk plant or put off its closing.

"They made it plain that they are not in the position to reconsider their decision," Kaine said upon his return to Virginia from Ford's headquarters in Dearborn, Mich.

With Ford's sentiments unwavering, Kaine said state officials now are turning their attention to the 2,400 workers at the F-150 truck-assembly plant. They may need training and other assistance to re-enter the work force once the plant closes in 2008.

But Kaine noted that officials have two years to prepare for the closing, an edge that some other communities will not have as Ford shutters plants across the country.

Ford's announcements have come amid disappointing U.S. sales. And higher gas prices may spell even more trouble for Ford, which is taking a hit on truck and SUV sales.

Considering the company's financial troubles, some industry observers had said that Ford would be unlikely to remain in Virginia.

"With such a raft of plants to close, once you're on that list, I think it's very difficult to get off," said Bernard Swiecki, project manager for the nonprofit Center for Automotive Research in Ann Arbor, Mich.

Kaine traveled to Michigan with Norfolk Mayor Paul D. Fraim and other state and local officials. They met with several Ford representatives, including Anne Stevens, chief operating officer of Ford's The Americas group.

The governor would not discuss any economic incentives that might have been offered. But given Ford's competitive prospects, business professor Peter Morici believes Virginia would not have fared well by offering a large package.

"This would be like investing in kerosene lamps in 1910," said Morici, of the University of Maryland's business school.

State officials have said they do not hand out incentives without a thorough analysis of how Virginia would benefit in terms of jobs and tax revenue.

Last month, Ford announced it would close the F-150 plant in Norfolk. The automaker also plans to close plants in Wixom, Mich.; St. Paul, Minn.; St. Louis; Atlanta; Batavia, Ohio; and Windsor, Ontario. All would be shuttered by the end of 2008.

Norfolk officials are particularly concerned because Ford paid top manufacturing wages -- an average of $65,000 a year with overtime. Those wages are about twice the regional average and at the high end of the manufacturing pay scale.

Some economists believe the large Hampton Roads economy will not be significantly impacted by the loss of 2,400 jobs. Others warn, however, that the departure of a high-paying employer will be felt and will ripple through affiliated auto-parts facilities. Military cutbacks also could pose a threat, magnifying the impact of the plant shutdown.
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