Ford workers wonder if it's really lights out in '09by Annie Baxter, Minnesota Public Radio
United Auto Workers union members at Ford's plant in St. Paul have ratified a new contract. Sixty-seven percent of voting members said yes to the deal which, among other things, will keep the plant open a year longer than expected. The plant was slated to close in 2008; the new contract calls for a 2009 shutdown.
St. Paul, Minn. — Ratification results won't be completely final until all of the Ford UAW votes are in and tallied, which could be sometime Tuesday.
But for now, many local union members are pleased by the prospect of keeping the plant's doors open an extra year, and some wonder if there could be life even beyond that point.
Ford worker Dan Story was glad to learn last week that the St. Paul plant might stay open an extra year, but he was not bowled over.
Outside the union hall where he had just voted, Story said he watched this past year as buyouts shrunk the union's head count from more than 1800 members down to 900. Story thinks that shedding of expensive workers made the St. Paul plant more efficient. So when he got word that the lights might stay on a bit longer at the plant, he took it in stride.
"No, I wasn't surprised," Story said. "In fact, I would hesitate to say that it's not going to stay open longer. This is actually what Ford wants in their system. They already have most of the membership gone, they're paying less wages. So what they have here is ideal, what they want all their plants to be like."
Ford won't comment on any aspect of the contract until it's ratified across the system. So it's unclear if the company sees hope for the plant beyond the new 2009 closure date. The contract itself does not suggest any greater longevity.
And the president of UAW Local 789, Roger Terveen, is not putting any bets on the chances of another extension.
"Do I think we'll go longer than Sept. 30 of '09? Your guess is as good as mine," said Terveen.
So how realistic is it that Ford would keep the St. Paul plant running beyond the time stipulated in the contract? The plant mostly manufactures Ford Ranger pick-up trucks. Ranger sales in the U.S. fell about 20 percent since last year at this time. But Ranger sales shot up 40 percent in Canada. That's good news, but it's not life-saving, because the Canada numbers are small. Ranger sales there hit 18,000 so far this year, compared to about 62,000 units sold in the U.S.
"They're cutting costs, they're not increasing sales, in terms of North America," said auto industry analyst Greg Gardner with Harbour Consulting.
Gardner thinks there are a lot of reasons why Ford would not be in a good position to keep the St. Paul plant open even longer. He points to Ford's big loss of market share company-wide this past year. And he said auto makers should operate plants at no lower than 85 percent capacity to maximize returns. Ford did not hit that mark last year; Gardner said their numbers were the lowest of all auto makers operating on the continent.
"Their company average for North America was 77 percent in 2006, that's very low, one of the major contributors to their record loss," said Gardner.
But other numbers look encouraging to Jesse Toprak. He's executive director of industry analysis for Edmunds.com, an automative information site for consumers. Toprak sees a deceleration in Ford's downward spiral, and he thinks that could have an impact on the St. Paul plant.
"Although car sales are down about 30 percent for Ford, truck sales, which are more profitable for them, are only down about 5 percent, despite having an older product line-up," Toprak explained. "So it's telling me that one of the reasons why this plant is probably kept open another year, was due to stable demand -- probably not growing demand -- but at least stable demand for trucks in general."
But the city of St. Paul is less sure about what's motivating Ford's willingness to prolong the plant's life. Cecile Bedor is director of Planning and Economic Development with the City of St. Paul.
"The contract between Ford and UAW is a national contract, so we have no way of knowing what was the tipping point that allowed the plant to stay open," said Bedor.
Bedor said the city welcomes any extension of the plant's life because it would mean the jobs stay put. And Bedor said deferring the plant's closure won't hurt the city's plans to redevelop the 125 acre site.
"If the plant stays open longer, that's just fine. It just delays the redevelopment of that," Bedor said.
If, in the end, the machinery at the St. Paul Ford plant grinds to a halt even later than 2009, union member John Biesanz won't be surprised. He's worked at the plant for 30 years. And Biesanz is used to the death knell tolling a demise that never seems to come.
"When I first got here they said within 6 months it would be done. That was 1977," said Biesanz. "That's always something we've heard over the years."
Biesanz said if the plant could stay open yet longer, he might reconsider his plans to retire next year.
- Morning Edition, 11/13/2007, 7:20 a.m.