Tuesday, October 21, 2014
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Reports of Ford plant closing spark caution and concern

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The Ford Ranger pickup, produced by the plant in St. Paul, has seen sales fall 24 percent so far in 2005. (Photo courtesy of Ron's Log)
State officials reacted with differing levels of urgency to a report that St. Paul's Ford truck plant is among those the company plans to close. Ford Motor Company says it will announce major restructuring plans in January, but has officially remained tight-lipped about what's in those plans. The St. Paul plant has been considered vulnerable as sales of its product, the Ford Ranger pickup truck, have plunged.

St. Paul, Minn. — This isn't the first time the St. Paul Ford plant and its 1,900 employees have come up as a target for cuts. Ranger truck sales are down 24 percent so far in 2005, and the company has made few substantial investments in upgrading the line. St. Paul workers have endured a number of temporary layoffs this year as the plant shut down for lack of demand.

The Wall Street Journal prodded this discussion by citing two anonymous sources who say St. Paul is among three U.S. plants Ford is currently planning to shut down as part of a restructuring plan. The news was enough to jolt some lawmakers, like Republican Minnesota House Speaker Steve Sviggum into calls for action. Sviggum says if the St. Paul plant is on the line, he wouldn't rule out a special legislative session to entice Ford to keep the plant open.

"We're not going to let this go without a fight," Sviggum says. "We're going to give every incentive we can to see those jobs are maintained."

It's unlikely the plant would close immediately; Ford's contract with union workers ensures jobs will remain until 2007. But Sviggum says if Ford plans to eliminate auto assembly jobs in St. Paul it would be "an emergency," and it might take tax or other incentives to avert it.

Several other public officials played down the report. In a short statement, St. Paul Mayor-Elect Chris Coleman says while the fate of plant lies with Ford, he has been assured the city will have a voice in the decision. He says any news now is speculation.

Ford spokesman Tom Hoyt agreed, saying the restructuring plan is not complete. "We wouldn't want to comment on exactly what will be announced in January, or what will be in the plan," Hoyt says. "It's premature to discuss that now."

The president of United Auto Workers Local 879 in St. Paul, Rob McKenzie, says losing the plant's $140 million payroll would be a blow to the state economy and hundreds of local families. But he thinks this early leak is uninformed.

"The sources I have closest say that they are not even going to name specific plants to close in January," McKenzie says. "The type of people that would leak something like this out are not the ones making the decision and don't really have the final word on it."

McKenzie points out that many early reports on plant closings at General Motors were ultimately proven wrong. He says Ford has long-term contracts for things like rail transportation in St. Paul and seats for the Ranger trucks, suggesting to him that the company is not giving up on the line of trucks or the St. Paul plant.

"We're still selling Rangers," McKenzie says. "I think we've got several years left of sales for the Ranger truck.

Governor Tim Pawlenty is urging Ford to convert the plant to produce a different kind of vehicle. Pawlenty suggests Ford use the St. Paul plant as the heart of a production and research center on clean and renewable fuel vehicles. He cites Minnesota's university research capability, and its prominence as a consumer and producer of ethanol and bio-diesel.

State commissioner of employment and economic development Matt Kramer says he's confident Ford has made no final decision, and says state officials have been working to influence the company's choice for some time.

"You don't approach a relationship like this by throwing energy and money at it in the last moments, in the throes of a company's business decision," Kramer says. "We've been spending well over two years now on the value of doing business in Minnesota."

That may not be enough though, according to auto industry analyst David Cole with the Center for Automotive Research. He says all the effort and creativity the state can muster won't change Ford's bottom line. The company lost $284 million in the most recent quarter.

Cole says Ford has one-third more production capacity than it actually needs. "They do have to take that capacity down substantially, and the Minnesota plant is a candidate, there's no doubt about it," Cole says. "It's not an option...in terms of Ford restructuring the company. It's basically change or die."

Still, Cole says he wouldn't consider anything certain until January, when Ford formally unveils its restructuring program. The company has dubbed the plan "The Way Forward."

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