SUV's falling sales doom night shift
Ford Motor Co. will eliminate the second shift at its Louisville Explorer plant by midsummer, laying off as many as 800 workers.
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But in making the announcement yesterday, the automaker repeated its commitment to
invest in the plant and build a new vehicle there in the next two years -- though company officials remain mum on what will be built or how many workers will be needed.
The doomed night shift at the Louisville Assembly Plant on Fern Valley Road employs 1,000 people, or half its work force.
A layoff of 800 "is in the ballpark," Ford spokeswoman Anne Marie Gattari said yesterday. "We don't know until we know how many people take buyouts."
Ford officials have been candid about weaning the payroll of workers who earn between $28 and $30 an hour. Under terms of its latest contract with the United
Auto Workers, Ford can replace up to 20 percent of its work force with employees who will earn half as much.
Even with lucrative buyouts being dangled at both Ford plants in Louisville until March 18, union officials yesterday predicted the ax will fall on a number of workers this summer.
A previous buyout, just last year, lured 2,000 away.
Now, few workers have the stomach or the resources to leave voluntarily, said UAW Local 862 Building Chairman Bruce Day, who oversees the 2,070 hourly workers at the Louisville Assembly Plant.
"We thought we would get through this, but we are not going to," Day said after a news conference last night. "There will be layoffs."
Explorer sales dwindle
Ford plans to impose the job cuts in late summer. The layoffs will eliminate the sporadic, weeklong, plant shutdowns the company has imposed every few months in recent years to hold production closer to sales, Ford officials said yesterday.
"We have to take some tough actions," Gattari said, noting that sales of the Explorer had plummeted by 32 percent since 2004. Ford announced yesterday that it sold 9,452 Explorers last month, 27 percent less than a year earlier. Ford has said it plans to stop building the Explorer altogether by the time it starts building a new vehicle in Louisville.
Right now, the plant cranks out 3,080 Explorers a week, clearly more than demanded by a car-buying public drawn increasingly to crossover sport utility vehicles or compact cars that consume less gas, Day said.
"We have been struggling to sell what we build," he said. "Until the economy comes back, I don't see us coming back."
But the contract approved last fall between UAW members and Ford Motor Co. contained pledges to invest in the Louisville Assembly Plant and bring a new vehicle there by 2010. Ford officials still plan to honor that contract, Gattari added.
"We made commitments to invest in these plants," Gattari said. "We intend to keep those commitments."
The last Explorer will roll off the line at the Louisville Assembly Plant in August of 2009, UAW Local 862 President Rocky Comito said yesterday.
What union officials need to know before that time, he and Day added, is how many Explorers, SportTracs and Mercury Mountaineers Ford plans to assemble each week. Only then can they calculate how many workers the plant needs.
"We do not know the number," Day said. "We hope the company will tell us next week."
Civic leaders look to future
Government and community leaders yesterday downplayed the impact that Ford's announcement would have in Louisville, saying the automaker's plans give reason to believe the city will fare well in the long run.
Mayor Jerry Abramson said he was "disappointed" by
news of the layoffs. But "they emphasized to us again today that there is a new vehicle in the works."
Abramson warned, however, that the city may have to go back and make budget cuts as it absorbs the impact of declining wage tax receipts from Ford workers.
He pledged that he and Gov. Steve Beshear will follow up with a planned trip to Ford headquarters in Dearborn, Mich.
U.S. Rep. John Yarmuth, D-3rd District, said he believes the community will bounce back quickly once Ford launches the new vehicle line.
Ford is eligible for hefty state tax incentives to help fund upgrades to the Louisville Assembly Plant. Last fall, the automaker applied for and received $60 million in tax incentives in exchange for plans to invest $200 million to retool the Kentucky Truck Plant on Chamberlain Lane.
"We did whatever we could last year to try to help them stay in Kentucky," House Speaker Jody Richards, D-Bowling Green, said yesterday.
Worries at truck plant
Yet there are tough times at the Kentucky Truck Plant too, where rolling layoffs have trimmed 350 workers for two to three weeks at a time since last fall in response to lagging sales of F-Series Super Duty trucks, UAW committeeman Rodney Janes said.
Rolling layoffs recruit volunteers who agree to be furloughed temporarily and receive most of their hourly wages through unemployment benefits and union-negotiated supplements.
Janes said that at the truck plant, which employs 4,000, some workers believe the company is arm-twisting workers to take the buyout to make room for new hires who will earn between $14 to $16 an hour with lesser health benefits.
"The morale is at an all-time low," Janes said. "The perception of our membership is that the company is trying to scare people into taking the buyouts."
Still, fear of gasoline prices soaring as high as $4 per gallon this summer softens demand each month for trucks and sport utility vehicles built in Louisville.
Ford is trimming inventories of increasingly unpopular trucks, sport utility vehicles and large cars.
At the Chicago Assembly Plant, home to the Mercury Sable, Taurus and Taurus X -- all slow-selling large passenger cars -- Ford will cut production to one shift, the automaker also announced yesterday. Ford is also cutting a shift at a Cleveland engine plant and delaying a restart of production at a second engine plant there until the end of this year.
Gattari said such trims are needed for Ford to survive.
"This is not something we want to be doing. We would much rather be growing," she said. "It is sad that that is how it feels, like arm-twisting."
Labels: Ford, Kentucky, layoffs, Louisville