DETROIT - Ford Motor Co.'s financial troubles claimed more victims Monday when the struggling company announced that it will close a casting plant near Cleveland in 2009, costing 1,100 hourly workers their jobs.
The nation's No. 2 automaker also announced that it will mothball the nearby Cleveland Engine Plant 1 for at least a year starting in two weeks due to lower-than-expected demand for its products.
The future of that plant's 530 hourly workers is under negotiation with the United Auto Workers union, but a company official said the plant would reopen with fewer than 500 production workers because it would be more efficient.
A second engine plant at a three-factory complex just west of Cleveland in the suburb of Brook Park, will remain open, Ford said.
"These are difficult actions, and we're approaching them with great sensitivity because they involve our people," said Joe Hinrichs, Ford's vice president of North American manufacturing. "However, operating an efficient and competitive manufacturing business is a key to our Way Forward plan to transform our business back to sustained profitability."
The closure is the 10th plant slated to be shuttered as part of a restructuring plan in which Ford said it would close 16 facilities by 2012. Nine of the closures had already been announced.
The casting plant, which makes crankshafts for Ford's four-cylinder engines, bearing caps, engine blocks and other items, is being shuttered because Ford is getting out of the casting business to save money and focus more on engines, transmissions and other items that customers will notice. Eventually the company will have outside parts suppliers make all of its castings, Hinrichs said.
Tim Levandusky, president of UAW Local 1250 at the Brook Park complex, said the union has not given up the possibility that it still might be able to change the company's mind about the casting plant.
"It's going to be very difficult," he said. "You know what's happening in the industry. The U.S. auto industry has been hurting for some time now. We're up against unfair imports and trade laws and a consumer that doesn't quite understand what it means to buy products made here in the United States."
Cleveland Engine 1 makes 3.0-liter V-6 engines and was being retooled to make a larger 3.5-liter V-6. But Ford said the plant was not needed at present due to market conditions and because a plant in Lima, Ohio, can supply the whole company at present.
Hinrichs said Ford retooled Cleveland Engine 1 because it expected, based on previous forecasts, that more 3.5-liter engines would be needed.
"Obviously the volume hasn't materialized," he said. "You have to align your capacity with the current demand that you have." Hinrichs said he expects the engine plant to reopen by next spring. "We're still committed to that production there," he said. The net job loss from Monday's announcement, Hinrichs said, should be the 1,100 hourly workers at the castings plant. More than 100 salaried workers at the plant will be offered opportunities elsewhere in Ford, he said. The company will repeat its buyout and early retirement offers to all workers at the Brook Park complex, Hinrichs said. So far about 25,000 workers with Ford and a holding company that is running plants it intends to close or sell have left the company under the program, Hinrichs said. Ford, which lost $12.7 billion last year and $282 million in the first quarter, is in the midst of slashing thousands of jobs and rolling out new products in an effort to shrink itself to match lower demand for its products. The Ford, Lincoln and Mercury share of the market has declined from around 26 percent in the early 1990s to 15.1 percent in the first quarter of this year. Hinrichs said Ford is ahead of schedule in shrinking its North American hourly work force by 25,000 to 30,000 by the end of 2008. The cuts in Brook Park are the latest planned by Ford in Ohio, which has been hit especially hard by Ford's troubles. Ford shut down assembly plants in St. Louis, Mo., and in Hapeville, Ga., near Atlanta, last fall. It also plans to shutter its Wixom assembly plant at the end of this month; plants in Norfolk, Va., and Windsor, Ont., this summer; and its Essex Plant in Windsor in the second half of this year. A transmission plant in Batavia, Ohio, an assembly plant in St. Paul, Minn., and a stamping plant in Maumee, Ohio, all are slated for closure in 2008. Hinrichs said Ford was not ready to announce the remaining six plants slated for closure. Ford stock fell 6 cents, or 0.73 percent, to $8.16 in Monday trading. The city of Brook Park, with 21,000 people, relies on Ford for about 30 percent of its revenue. The castings plant closure likely will cost it more than $2 million per year out of its roughly $20 million budget, said Mayor Mark Elliott. The city, he said, has tried to diversify its economy and has added new companies in the past few years, but not enough to make up for the Ford loss. "It's a great impact on our community. But we'll rebound. We'll be OK in the long run," he said. --- Associated Press Writer Joe Milicia in Cleveland contributed to this report. --- On the Net: Ford Motor Co.: http://www.ford.com AP-CS-05-07-07 1719EDTcomments powered by Disqus