Ford on Tuesday said it will end one of two production shifts at its suburban St. Louis, Missouri, assembly plant after the end of this year, eliminating about 800 jobs, or more than 30% of the work force at the facility.
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The Associated Press (AP) said the Hazelwood plant employs more than 2,600 workers making the Ford Explorer, Mercury Mountaineer and Lincoln Aviator sport utility vehicles and noted that, in 2002, Ford announced plans to close the factory by the middle of the decade, among other things citing declining SUV sales. Ford reportedly said it could save money by moving production of the Hazelwood-built SUVs to the automaker’s newer plant in Louisville.
AP added that Ford reversed its decision in September 2003 after a strong lobbying effort led by state governor Bob Holden and St. Louis-area officials, including members of a task force Holden empanelled to get the factory off Ford’s closure list.
Ford reportedly agreed as part of its latest contract with the United Auto Workers to keep the site open at least to the end of 2007, though the company planned all along to eventually end the second shift and its estimated $US60 million in wage and salary costs.
According to AP, with the change originally planned for April of this year, Ford in February postponed the shift elimination “indefinitely” before notifying the plant on Tuesday that the second shift would be jettisoned from January 3.
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By GlobalData“They knew from last September that we’d be taking it down to one shift; now, they know the timing,” Ford spokeswoman Marcey Evans told the news agency, adding that the Louisville plant would be unaffected by the Hazelwood plant’s staffing cutback.
Sales of the Explorer – including the Sport and Sport Trac versions – this year to the end of August were down 6.7% over the same period in 2003, the Associated Press said, citing Autodata Corp. Sales of the Mountaineer reportedly have slid 2.4%, while demand for the Aviator has slumped 18%.
Last week, Ford announced it had a sub-par August, saying overall sales of its Ford, Lincoln and Mercury brands fell 5.9%, AP said. Despite heavy consumer incentives, Explorer sales were 30,603, down 15.6% from 36,254 from August 2003, while demand for the Mountaineer tumbled 16.4% to 4,335, from 5,188 and sales of the Aviator plunged to 1,715, off 41.5% from 2,934.
Ford reportedly said it expects its North American factories to produce 830,000 vehicles in the fourth quarter, 70,000 fewer than during the same period last year.
“This announcement is not a surprise,” Patrick McKeehan, director of the Ford-Hazelwood task force, told AP. “We had such a run of good luck of late that we were hoping that both shifts would continue on.
McKeehan reportedly said additional details were sketchy, “other than the heads-up that this is happening.”
“Although we may not agree with the decision, I guess Ford’s working on their long-term projections of what demand will be,” he told the Associated Press.
