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| Ford's Norfolk Assembly plant.
(file photo) |
By Jeremiah McWilliams
The Virginian-Pilot
NORFOLK - The end of the line for Ford Motor Co.'s F-150 truck plant will come sooner than originally planned as the company speeds up its North American restructuring.
In January, Ford will permanently drop one of two shifts at the 2,355-worker factory and stop building F-150s in Norfolk later in 2007 - a year earlier than stated five months ago.
"Every bit of news they put out is a little worse," said Chris Kimmons, president of United Auto Workers Local 919 at the plant, but with the plant scheduled to stand idle for two months this year, the loss of a shift "was pretty well written on the wall," he said.
Under Ford's revised "Way Forward" restructuring plan, as many as 30,000 hourly jobs will be cut in North American plants by the end of 2008, four years earlier than the scenario outlined in January.
Ford will cut about 14,000 salaried employees in North America - a third of its salaried work force and 10,000 more people than announced in January. After losing $1.45 billion in North American automotive operations in the first half of 2006, Ford hopes buyouts and faster plant shutdowns will help cut $5 billion in annual operating costs by 2008.
"We believe these changes, which are massive, will be enough to put us back on track," said Mark Fields, Ford's president for the Americas, during a conference call Friday morning. "We know these decisions bring even more pain to our business in the short term, and they will require sacrifices.
"We're dealing with the world as it is, and not as it was 10 years ago," Fields said.
Kimmons predicted the plant, which dates to 1925, could shut down by next September, although Ford has not announced a date. Other union members speculated that the end could come earlier next year, perhaps before July's traditional model changeover.
In January, the night shift will be dropped and the plant will only build trucks on the day shift, Ford spokeswoman Anne Marie Gattari said. Seniority will determine who keeps working, she said.
Last month, Ford said the plant will assemble F-150s for only six weeks through the end of the year, using a single shift.
Sales of F-Series trucks, the country's most popular, fell by 12.7 percent this year as gas prices climbed and construction slowed. Local F-150 production fell by 16.2 percent through August.
"It's very disappointing but not a surprise," Gov. Timothy M. Kaine said of Friday's announcement. "It really increases the sense of urgency" to provide training and education options for workers.
"This really means we need to take those plans and fire them up even more," he said.
A two-year-old truck plant at Ford's Rouge complex in Dearborn, Mich., will add a third shift next year when Norfolk Assembly shuts down, enabling the Michigan facility to build more F-150s.
Gattari said Norfolk workers would be able to request transfers. "With the pull-ahead of the idling, we will be focusing on trying to place people," she said. For "those who want to come to Dearborn Truck Plant, we will give them the opportunity to do so and, of course, help others with their transition."
On Thursday, Ford acknowledged that it would offer eight buyout options to its 75,000 UAW-represented hourly workers in the United States. The company expects that most workers who elect to leave will do so by next September.
That's when Ford's national UAW contract is set to expire. Analysts expect Ford to fight to eliminate its "jobs bank" program, which pays full wages to about 1,100 union members while they are not working.
The program is "a poster child for the problems of the domestic auto industry," said George Hoffer, a professor of economics at Virginia Commonwealth University in Richmond.
The program's potential demise will probably spur more workers to grab buyouts and leave the company, said Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass.
"The next round of negotiations are going to be incredibly contentious, but I don't think they're going to save anyone's job," Chaison said. "I don't see anything pointing toward a good future at Ford if you don't accept the money."
The Ford plant's shutdown will reverberate through the region. For every two Ford workers who lose their jobs, five other Hampton Roads employees could lose theirs, according to estimates from the Hampton Roads Planning District Commission. It predicts the shutdown will reduce total personal income in the region by about $560 million in 2012.
Norfolk Mayor Paul D. Fraim said Friday the city will lose
$4 million or so in net revenues the first year the plant is closed.
"That's just an estimate," Fraim said, noting Ford will continue to pay more than
$1 million in property taxes on the 102-acre parcel near the Eastern Branch of the Elizabeth River. "They are still going to be paying some wages, still going to have some utility costs, still going to have some personal property they pay tax on, for a time. But that number will obviously dwindle over the next several years."
A group of officials from local and state governments as well as from the UAW, Ford and others will meet at the plant Tuesday for a planning session devoted to helping workers with training, education and career coaching, said Lynette Hammond, state assistant secretary of commerce and trade.
"We've got so many responders here, we all want to know what the others are doing so we're not duplicating anything," Hammond said.
The situation at Ford's local suppliers is tenuous. After about 30 workers were laid off last week from a TDS/US parts-sequencing facility in Chesapeake, enough workers remain only to run one shift, said Webster G. Clarke II, the UAW chairman for the facility.
Ford now expects to lose money in its North American automotive operations until 2009, rather than regaining profitability in 2008 as previously hoped. Executives attributed some of Ford's recent drops in earnings, sales and market share to shifting consumer tastes toward cars and away from traditional sport utilities and large pickups - Ford's mainstay products.
The shift "hurts the full-size pickups, our bread and butter, particularly hard," Fields said. F-Series trucks contribute about a third of Ford's sales.
"It is now clear that we were too optimistic in January about our ability to stabilize market share," Fields said. "The simple fact is that the business model that has sustained us for decades in North America no longer works."
Ford said it will shut the Maumee Stamping Plant in Ohio and the Essex Engine facility in Windsor, Ontario, by 2008. The Canadian facility builds V-6 engines for F-150 trucks.
Ford's expanded plan calls for upgrades or redesigns of 70 percent of Ford, Lincoln and Mercury vehicles by 2008, and intensified product-development work on small cars and crossovers and more investment in fuel-efficient vehicles.
"They're in a change-or-die situation," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. "Nobody likes these kinds of situations, but they have no choice."
Staff writer Harry Minium contributed to this report.• Reach Jeremiah McWilliams at (757) 446-2344 or jeremiah.mcwilliams@pilotonline.com.
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Quality will go down
One of the other sad parts is that the quality on the trucks leaving the Norfolk plant will go down considerably...it's human nature, if you're going to lose your job, your mind isn't certainly on going that extra step to ensure that the fit is right, or that bolt gets only 15lbs of torque, etc....sad situation...but definitely don't buy any F-150s from the Norfolk Plant in the near future.
The Goose that laid the Golden Eggs.
Ford always paid their people well and the checks always cleared. The unions cost the company so much money over the years, (wonder how much of it went to organized crime and the Democratic Party.), that it could not compete with the foreign companies. GM and Chrysler have the same problem. Because of the union you had to be in the family or know someone to be hired. Pretty much like the longshoremens union. Now they weep, moan, and cry out. Kinda like you couldn't see it coming a mile away. Smart move by Ford, closing early. That way they can avoid some of the union "demands", & possoble sabotage of the trucks and plant itself. I too was laid off after 20 years working with the same company. No pension, no benefits, no buy-out, no unemployment checks. Didn't weep, moan, or cry. Just got to work and started a new career. At 52 years old. Buncha crybabies if ya ask me.
I hope you laid-off workers take time to get an education
because people with a bachelor's degree earn a million dollars more over their lifetime than those with only a high school diploma. And now that the gravy train is ending you will quickly find out how bad the wages are here for comparable work, that is if you can find any that come close to the pampering you're used to. I was in the same situation once after a federal government worker RIF. Don't waste your time and money going back to another dead-end blue collar job. There are many more thirty and fortysomethings at universities full time than you might think, you will not be alone or left out because you are older. In fact, your age and experience will make you a better, more disciplined student.
The grass isn't always greener....
Hey, go figure, I guess we all saw it coming - like it or not!! Go talk to your neighbor about his Honda or Toyota. My stepfather got 3 recalls for his new Tundra (and he's not the only one) and still talked trash about my 03 Explorer. As a matter of fact this will be his truck's 4th trip to the dealer in the past 2 months after getting almost the whole front suspension replaced and he has logged only 40,000 miles on it. My Explorer hasn't been back yet for anything and he still has an arrogance about the quality of his truck!!! Read the news - Toyota quality goes down as sales go up, Duuhhhh!!!! Think about it as you drive your Tacoma or Camry around town. An old perception goes a long way. You could be saving jobs, but some of you tend to hold on to a belief that was born years ago, yet call for change in today's market. Keep showing your allegiance to the foreign companies and one day you will be getting laid off by Toyota - it's a vicious cycle!!!
What will next year for 2007 to 2008
What is wrong with this picture about closing the planet early next year. The employees have to start looking for a new job or get transfer to other states with Ford Company. This is not fair for the family member who have employees working with this company long ago or just start. This hard for the employees are not making has much on the paychecks because their have bills to pay and support their family. The company is really hurting the company very much. I have family member works for the company. We should try to save the company.
Mind boggling
It's scary to think that Ford didn't see this coming. We live in cycles and it was time for this to happen. If Ford survives another 30 years, I hope their leadership will have the good sense to taylor their products and production to a more reliable, but modest product offering. Style is cheap.
It's what's under the hood that is detremental to the health of Ford.
WHERE'S YOUR INFO FROM?
alex - I think your quality numbers are not fact based - you are working off of a perception - not facts. I'm sure you can show some facts that show some imports w/ better quality(or even better oevrall company quality), but many of the big 3's products beat similar imports(or even "american" imports built by these "happy" american's you describe). a decade behind in quality - where did you get that one?? The locally built ford beat toyota's mid-sized truck many years in a row in quality - but those toyota customers swore their product was better - because that is there perception. Keeping thaqt perception alive will just kill off the already ailing auto industry and the trickle down affect will hurt the country(and help all of those foreign countries). The big 3 have problems - we all know that - but its like the general public is just so happy some good jobs in this region are gone. Plenty of good people will be affected by this - You could be next.
close it
Ford, you don't owe anyone a job. We all know you can't afford the union wages and benefits. So shut it down and cut your losses. Let the workers gripe about executive salaries as they always do - let them play the instrument of class envy employing the Pilot to garner more sympathy. But people get laid off. It happens, it has happened to me, and it could happen to you. If you get a buyout, well then you ought to be thrilled. Because, again, Ford doesn't owe you anything - I don't care how long you work somewhere, or how much time you put into something. You were GETTING PAID. That's why you did it. Now suck it up, quit whining, get over losing the plant, and move on your life.
And the unions are blameless...
Okay, looks like the union types have come out of the woodwork and decided to write in. You will hear about terms such as "living wage" (which is about half of what union workers make) and "government responsibility" which is not known by ordinary citizens. Welcome to the real world. If you add up all the benefits, retirement and wages here, it probably comes out to about $60 an hour for each employee for Ford to keep the factory open. For us in the real world that are in business for ourselves, we understand why Ford is in such dire straights. Ford can have a factory in Mexico or South America and have a cost of about $20 an hour per worker and have better quality (I have driven both vehicles) why blame them? If Ford union workers would only lower their wages voluntarily to half of what they make (still a very livable wage) Ford would fall all over itself to keep production in this country. I think we all see where the greed is…
Thelma Drake's Message to Ford Workers "Drop Dead"
If the Ford workers want any help from Thelma Drake, she is available to talk to you but it will cost you a cool $5,000.
Thelma's silence and lack of action to help her constituents as thousands are thrown out on the streets speaks loudly about where her interests lie.
Unions?
I certainly sympathize with these fellow citizens! however, when a reported $3000.00 from the sale of each vehicle made by Ford, GM, Chysler union workers is needed to go toward benefits, ie, pensions, medical etc., this was doomed for a long time!
The real reason is
Because American carmakers have been too spoiled for too long. The foreign manufacturers make their cars here, so I don't believe a word of the "union worker" nonsense, or the "Ross Perot" fear of our jobs going to Mexico. In fact, US auto makers are 1 dimensional. They see a trend toward a type of vehicle, so they dump everything they do into making that and nothing else. A few years ago, the only thing keeping GM alive were the Firebird/Camaro twins. Next came the minivan, which Chrysler claimed it invented, but VW did decades earlier. Then came the SUV craze, but that got hammered by $3/gal gas. The companies need to focus on the whole market, be innovative, and design reliable cars that make us want to buy them. Until they do that, the plants will keep closing, and they will continue to lose to Toyota and Honda.
Business History Lesson
There was once a company that made a good watch. They lowered their prices so that everyone who wanted one could afford one. When everybody that wanted one had one,guess what happened to sales? Through the floor. People driving sensible sized vehicles cannot see to get out of a parking space if a Monster Vehicle is parked beside them. And there's nothing like having a Monster Vehicle come zooming up behind you with the bright lights on at night. Over-the-speed-limit is the norm for these king-of-the-road cowboys. Ford should get rid of their shortsighted executives soon before the Fix Or Repair Daily/Fabricacion Ordinario Reparacion Diario company becomes history.
Recession in 2007/2008
Recession in 2007/2008. Much of the consumer spending has been fueled by the run-up in house values. The wealth effect had people feeling good over their new found net worth. People extracted money from their houses (adding debt) and bought new vehicles. Now this is slowing down.
In response to the Mark, there are real uses for large trucks such as towing. The Ford trucks are popular in business. To those bitter over the unions, the salary of the Ford workers is most likely proper. Compare the change in the take home pay of CEOs to the take home pay of normal employees. I forget the actual figure but CEO pay is now 400 times greater than X years ago, while normal employees may have doubled. The credit bubble / housing collapse / recession might anger people into action. I hope.
OK, Now we know, time to get a job.
Ok, so now it's official, the plant will close in 2007, soooo Ford employees, make the decisions that most working people don't get when they get laid off, that being a year's notice and nice, juicy separation packages. Buttttt, I'm sure the Pilot will continue to push this issue and we'll get an outpouring of sympathy for employees that rode the gravy train and now get attractive buyouts. Break out the tiny violins.
better gas mileage might have saved tehm
I've sent emails to Ford about this before. Had a friend back in the 1970's that had purchased a ford with a 427 cu in engine that was getting better than 40 mpg back in the late 1960's. And Ford had contacted hinm back then that there was a "problem" with the carberator and to please bring the car in to get a new on for free. You bet there was a problem. The gas mileage with that expeimental unit was great. Now if Ford would make their trucks getting 25 mpg or better, they might not have this problem of loosing money. The tecnoligy is there, the oil industry just wants to block its getting out to the public.
Big trucks! The American Way!
Those of you suggesting that American auto companies didn't see the writing on the wall, you are correct. To suggest that Americans have some sort of "little-man-syndrome" in regards to big trucks is a little idiotic. For you folks that comment "That's what you SUV/truck driving people get for not buying a Honda", I ask what is the square footage of your average new home in the area. Americans always go overboard! That's why we have what we have. Don't be self-righteous about gas-guzzling, it's old. If we were really concerned about conservation, we wouldn't build 3000 square foot homes for families of 2. Get over yourselves and move into an one bedroom apartment and take public transportation to work. Also, don't bother with AC or heat... It's wasteful. Solar power is much better.
Attitudes make all the difference
Why is it when Americans are managed by Japanese companies they make better cars. The workers for toyota and honda don't make as much, but they produce better vehicles and seem to be happier. Most of all they are not in the union which robs them. Ford has created a culture of entitlment where high school graduates make the same as engineers. This is not realistic in a global economy. People talk about buying American until they find better quality for less money from abroad. Ford is at least a decade behind in quality compared to Toyota. The management doesnt tolerate opposition nor does it foster an environment of innovation. This is what you get when you inbreed your management and hire your buddies.
Why.....
.......should the government bail out Ford? The current situation at Ford is the result of poor management, period. The last time I noticed, Toyota and Honda are building many of their vehicles here. As for this statement, "But rapid shifts in consumer demand...." Hello! Ford is clearly reacting to the market, not being proactive as it should have been all along. I feel sorry for the Ford workers and those affected outside of Ford (who, by the way, will not have buyout packages), but saying Bush and the government should bail Ford out is ridiculous!
Catalyst...
This will only stimulate a local housing market collapse sooner than later. Hopefully plant workers had paid off their mortgages or have enough tucked away to cover expenses until they find construction work, oh but those jobs are starting to fade as well. No worries, I'll pay your unemployment with my hard earned money.