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Major changes ahead at Ford

A balloon advertises a special price on a pickup truck at a Ford dealership in Tacoma last week. Slumping sales and underutilized production facilties may bring major restructuring. (Associated Press / The Spokesman-Review)
Associated Press
A balloon advertises a special price on a pickup truck at a Ford dealership in Tacoma last week. Slumping sales and underutilized production facilties may bring major restructuring. (Associated Press / The Spokesman-Review)

DETROIT – Ford Motor Co.’s board of directors began a two-day meeting Wednesday to consider a sweeping restructuring plan the company hopes will help pull it out of a slump. Thousands of jobs are on the line and several plants may shut down to help the nation’s No. 2 automaker overcome rising costs and the loss of market share to foreign rivals.

Ford has at least eight assembly plants at significant risk of closure for many reasons, including the products they make, their age, their proximity to suppliers and the flexibility they have to produce a variety of products, according to auto analysts from consultants Global Insight Inc. and IRN Inc., and restructuring firm Conway, MacKenzie and Dunleavy. The plants employ more than 17,000 hourly and salaried workers.

Tom Hoyt, a spokesman for Ford, wouldn’t discuss details of the restructuring Wednesday, saying the plan hasn’t been completed. But the board was holding a regularly scheduled meeting in Dearborn, Mich., and one of the items on the agenda is the restructuring plan.

The automaker is expected to reveal the plan on Jan. 23, according to United Auto Workers Vice President Gerald Bantom, who is in charge of negotiations with Ford. Bantom said he had no details of the plan, but industry analysts say Ford must take major steps to get its plant capacity in line with falling U.S. demand for its vehicles.

Ford used only 86 percent of its North American assembly plant capacity in 2004 compared to rival Toyota Motor Corp., which is running at full capacity, according to the Harbour Report, which measures manufacturing productivity. Ford has around 23 assembly plants in North America.

“This is not something that is going to be trivial. This has got to be substantial restructuring,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.

At the top of the list for closure is the St. Louis plant in Missouri, which makes the struggling Ford Explorer and the Mercury Mountaineer. Explorer sales were down 30 percent in the first 11 months of this year despite an extensive redesign.

Also high on the list are the Atlanta, Ga., plant and the Twin Cities plant in St. Paul, Minn. Atlanta makes the Ford Taurus sedan, which is scheduled to be phased out next year, while the Twin Cities makes the slow-selling Ford Ranger pickup. A plant in Cuatitlan, Mexico, which makes F-series trucks for the Mexican market, also is at risk, analysts said.