Ford May Change Some Plant Closure Plans
Ford Motor Co. might save some of the six plants it intends to close if it can get other cost savings from the United Auto Workers union in their new contract, people briefed on the ongoing negotiations said Monday.
The people said the fate of the plants is one of many issues still on the table in the talks. The people spoke on condition of anonymity because the talks are private.
Ford spokeswoman Marcey Evans said she couldn't comment on the talks Monday. A message was left for UAW spokesman Roger Kerson seeking comment.
The UAW is turning its attention to Ford this week after workers at Chrysler LLC narrowly approved a new four-year contract in voting that concluded over the weekend. General Motors Corp. workers approved a similar agreement earlier this month. The UAW's contracts with all three automakers were scheduled to expire Sept. 14 but were extended as talks progressed.
Ford is struggling to reduce factory capacity to match its U.S. market share, which has dropped from about 26 percent in the early 1990s to about 15 percent for the Ford, Lincoln and Mercury brands. Ford used about 79 percent of its plant capacity in 2006; a company needs to be in the low- to mid-90-percent range to maximize profitability, said Greg Gardner, an analyst for Harbour Consulting, a Troy company that tracks manufacturing productivity.
The automaker has named 10 plants it will definitely close by 2012 as part of a restructuring, and it is considering closing six more. Those six plants have not been named but are under consideration in the contract talks.
Gardner said those six plants could include Ford's Chicago Assembly Plant, which used just 65 percent of its capacity in 2006, and plants that make trucks and sport utility vehicles, including the Louisville Assembly Plant in Kentucky and the Michigan Truck Plant in Wayne. A Canadian plant that makes large sedans also is considered vulnerable, but it's not part of this year's talks because it's not covered by the UAW.
Ford is expected to ask for more concessions than GM or Chrysler because it's in the worst financial shape. Ford lost more than $12 billion in 2006 and has mortgaged its assets, including its blue oval logo, to fund its turnaround plan.
Ford will likely agree to fund a union-run trust for retiree health care costs, as GM and Chrysler did, but it may try to get more favorable terms for funding that trust. The UAW also is likely to agree to lower wages for thousands of newly hired non-assembly workers at Ford, as it did at GM and Chrysler, but Ford could try to expand those classifications. Ford and the UAW already have agreed to an early retirement and buyout offer to trim the ranks of U.S. hourly workers, one of the people said, but the number of workers that would leave is still being negotiated. The union also agreed to buyouts at GM and Chrysler. ( AP )