Ford to Shutter Two More Plants

Ford Motor Co. (F) said Thursday it plans to shutter its St. Paul, Minnesota, and Norfolk, Virginia, assembly plants by 2008 as part of the automaker's broader restructuring plan.

The announcement affects over 4,300 people employed at both the plants.

Click here to visit's Autos page.

Ford's restructuring plan, dubbed "Way Forward," calls for closing 14 plants, including seven assembly plants, and slashing up to 30,000 blue-collar jobs. It is designed to reverse a $1.6 billion loss last year in the company's North American operations.

Local United Auto Workers union officials had told Reuters earlier that the plants were going to be closed.

The Minnesota assembly plant, which employs 1,750 hourly and 135 salaried workers, builds Ranger compact pickup trucks, which have seen demand decline sharply in recent years.

The Norfolk assembly plant, which has 2,433 employees, builds Ford's best-selling F-150 pickup truck, which is also assembled in Ford's Dearborn, Michigan, and Kansas City, Missouri, facilities.

Mark Fields, president of Ford's Americas region, said the plants were chosen to be idled based on location, material logistics and operating costs,

He told reporters and analysts on a conference call that despite the decision to idle the Virginia plant, the automaker will maintain its production capacity for the full-size pickup truck.


"We are reducing the number of plants, but we are not reducing the F-Series capacity," Fields said, adding that flexible manufacturing will help maintain capacity.

Ford said on Wednesday it aims to sell more than 900,000 F-Series trucks this year for a third year in a row.

"Our goal is to build more trucks with fewer plants," said Anne Stevens, chief operating officer of the Americas region.

But Ford declined to reveal plans for the Ranger, sales of which fell nearly 23 percent in 2005 and are down 16 percent so far this year.

Product plans surrounding Ford compact pickups will be announced closer to the end of Ford Ranger production in 2008, the company said.

Ford has already announced the closure of assembly plants in Wixom, Michigan; St Louis; and Atlanta.

Strong competition, soaring health-care and raw material costs, and a slide in U.S. market share had forced the automaker to announce a second restructuring for its North American operations in four years.

"I have never seen the auto industry this bad," Chris Kimmons, president of UAW Local 919, representing workers at the Virginia plant, told Reuters.

Ford executives also said the company is on track to have 82 percent of its North American assembly facilities flexible — or to enable multiple vehicles to be built on the same line — by 2008, up from 38 percent in 2004 and ahead of the previously announced target of 75 percent.

Click here to visit's Autos page.