Canadian Auto Workers president Buzz Hargrove is worried about the future of a Ford Motor Co. engine plant in Windsor, Ont., and a car assembly plant in St. Thomas, Ont. that was identified by an analyst yesterday as being "vulnerable" to closing when the auto maker announces a restructuring plan next week.
Ford is scheduled to announce plant closings as well as job cuts numbering in the tens of thousands on Monday as part of what it calls its "Way Forward" restructuring plan. Mr. Hargrove and CAW leaders have been called to a meeting with Ford officials at 7 a.m. Monday to hear details.
That meeting, and the shock announcement by General Motors Corp. in November that it will close an assembly plant in Oshawa, Ont., have the CAW boss on edge.
"We thought we'd left the [Ford] bargaining table with finalization of restructuring in Canada," Mr. Hargrove said yesterday. "But we thought that at GM as well, and given that they came back very quickly with a major announcement, I am concerned."
Ford agreed in bargaining with the CAW last fall to make a $200-million investment at St. Thomas to refurbish the plant and agreed to keep open the Essex Engine Plant in Windsor, Ont., by producing a new engine there some time later in the decade.
"In tight times, companies tighten up on these kinds of new investments," Mr. Hargrove said. "Do I think they're going to? No, I don't. Am I concerned they might? Yes, I am. Those are the two most vulnerable pieces."
Several analysts agreed yesterday that Ford will announce the shutdown of assembly plants in St. Louis, Atlanta and St. Paul, Minn.
However, there was debate about whether production of Ford Crown Victoria and Mercury Grand Marquis full-sized sedans will cease in St. Thomas.
The closing of St. Thomas is "likely," Catherine Madden, an analyst for Global Insight Inc. said yesterday in a webcast from Boston.
"St. Thomas remains vulnerable if the Panther platform is removed," Ms. Madden said. The Panther platform supports the Crown Victoria and Grand Marquis assembled at the southwestern Ontario plant.
Other analysts disputed that prediction, although they insisted on anonymity.
One analyst said cutting production to one shift a day from the usual two is possible at St. Thomas.
"It's more efficient to run it at one shift at a high line speed and combine it with overtime if you need to," one observer said. "If you eliminate a shift you take out more cost."
This analyst pointed to Essex engine as being in greater danger than St. Thomas.
Both plants are shut down this week as Ford tries to adjust inventories of the cars to declining sales. Sales of the cars slid 14 per cent last year in Canada and the United States.
The second-largest U.S. auto maker has been battered by a massive slide in sales of profitable full-sized and mid-sized sport utility vehicles and is in a fierce price war with GM, the Chrysler group and others.
Ford's market share slumped to 17.4 per cent in the United States last year, down from about 25 per cent a decade ago.
The company used just 79 per cent of its production capacity last year, less than GM and Chrysler and the three Japan-based companies with big operations in North America, Honda Motor Co. Ltd., Nissan Motor Co. Ltd. and Toyota Motor Corp., Ron Harbour, president of Harbour Consulting, said yesterday.
Ford is in a delicate position when it comes to job cuts in Canada.
Agreements made with the Ontario and federal governments for $200-million in financial support for a redevelopment of its Oakville, Ont., factories required it maintain employment in Canada at roughly 12,000 people.
Closing St. Thomas and eliminating the 2,500 jobs there would take Ford's employment close to 10,000.
The closing of the Windsor Casting plant, which was included in the CAW deal, will wipe out about 500 jobs. Ending production of V-6 engines at the Essex Engine Plant, also in Windsor, will eliminate another 600 jobs, but Ford promised to add a V-8 engine to the Essex plant, which appeared to mean it would not close entirely.
16
