Facing plant closure, Ford workers ponder buyouts, transfers

(AP) - The news hasn't been good this year for workers at the St. Paul Ford Motor Co. plant. No surprise, then, that Brad Jeppesen wasn't eager for the latest restructuring update Friday.

"All these news conferences, they don't say anything," said Jeppesen, 36, who assembles truck bodies and was furloughed with most of his co-workers this week. "It's coming out so slow."

Ford, reeling from a quick consumer shift to higher-efficiency vehicles made by others, is speeding up job cuts and closing more plants. The company also said it is cutting more than 10,000 additional salaried jobs, and offering buyouts to all U.S. hourly workers, including about 1,750 in St. Paul.

The 81-year-old plant that makes Ford Ranger light trucks here is still slated to close in 2008 and will lose a shift next year.

The shift reduction is expected to hit 700 to 800 workers as early as January, said Roger Terveen, who heads United Auto Workers Local 879. He said union officials have been told the St. Paul plant will go idle in the second quarter of 2008.

Meanwhile, Ford's St. Paul autoworkers are pondering eight buyout options ranging from $35,000 to $140,000 depending on seniority and age. Plenty of questions about the offers are expected to come up when the weeklong layoff ends Monday, Terveen said.

Todd Wiech, a 46-year-old Ford worker who lives in Howard Lake, had a lukewarm response to the buyout. With 18 years at Ford, he's weighing the buyout against a possible transfer to a Dearborn truck plant that's adding a third shift to make F-150 full-sized pickup trucks. He could retire in 11 years.

"It's certainly not enough to retire," he said of the buyout. "It's better than just being let go. Yeah, it doesn't solve any problems."

Jeppesen, who's put in 14 years at Ford, was also mulling his future. He said he's thought about transferring to a Kentucky Ford plant, but he also plans to get training as a commercial driver this fall and is looking at other job options he declined to discuss.

He said he wouldn't take a buyout for less than $100,000, since almost half the money would go to taxes. Still, the cash would help with a transition to a new lifestyle.

"You could pay some bills off and take a job with a little less pay and still be fine," Jeppesen said.

St. Paul's economy is expected to weather the plant closure without much problem, said Bob Hume, a spokesman for Mayor Chris Coleman.

Ford indicated that it is ready to accept a smaller slice of the market, focusing on profitable sales instead of sheer volume.

The factory, which has its own hydroelectric power plant, sits on a prime piece of land on a Mississippi River bluff. Potentially, the land could generate far more in property taxes.

"I don't think it's going to cause a domino effect," Hume said. "We're working hard with everybody who employs people in our region."

Ford said it would complete its cuts of about 30,000 hourly jobs by the end of the 2008, four years ahead of its previous target. Ford also said it already had cut 4,000 salaried positions in the first quarter of this year.

The new cuts would reduce Ford's total North American work force by 29 percent, from the current level of about 130,000 to about 92,000 by the end of 2008.

By 2008, North American factory capacity will be reduced by 26 percent compared to 2005 levels.

Ford also plans to suspend the quarterly dividend on its common and Class B stock in the fourth quarter of this year. It said it expects to achieve full-year profitability in its North American automotive operations no earlier than 2009. The company had previously pledged to make money in North America in 2008.

Ford lost $1.4 billion during the first half of this year and is under pressure from Wall Street to make further cuts and roll out new cars and trucks more quickly.

In July, the company pledged to accelerate its "Way Forward" restructuring plan, which when introduced in January called for the up to 30,000 job cuts as well as closing 14 facilities by 2012. The new cuts bring the total number of plant closures to 16.

The company indicated that it is ready to accept a smaller slice of the market, focusing on profitable sales instead of sheer volume. It said that, with investments in new products and quality improvements, it expects market share of about 14 percent to 15 percent going forward.

This year, the company is forecasting Ford, Lincoln and Mercury market share in the low-16 percent range. The country's second-largest automaker has seen its market share decline steadily in recent years from about 26 percent in the early 1990s.

"Turnarounds of this magnitude succeed when capacity and costs are aligned with a realistic expectation of demand," Chief Executive Alan Mulally said in a statement. Mulally, who was named to the post last week, led a turnaround at the commercial jetmaking division of Boeing Co.

The company also said it would roll out new or significantly upgraded cars and trucks in 70 percent of its Ford, Lincoln and Mercury brands, expanding in growing areas such as car-based crossovers.

At the same time, Ford said it will try to maintain its lead in the truck segment by introducing a new F-150 that will go on sale in 2008.

Ford has acknowledged a need for drastic changes in its product lineup. Like other U.S. automakers, its bottom line is heavily dependent on high-margin trucks and large SUVs, but recently consumer preferences have shifted toward more fuel-efficient vehicles. Ford says the speed of that shift caught it by surprise.

Ford's method of slashing its work force is similar to cuts made earlier this year by rival General Motors Corp. At GM, 34,410 hourly workers have accepted buyouts or early retirement offers this year. Figures on white-collar cuts were not available.

(Copyright 2006 by The Associated Press. All Rights Reserved.)

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