Ford cutting up to 30,000 jobs; St. Paul plant spared, so far

St. Paul's Ford Ranger plant has dodged a bullet for now. But the facility may not be out of danger.

Ford officials said at a Monday morning news conference in Detroit that the company will close five plants -- in St. Louis, Atlanta, Wixom, Mich., Batavia, Ohio, and Windsor, Ontario, as part of plans to put the firm's North American operations back in the black. The St. Paul plant had been grouped with those others as a likely candidate for closure.

But Ford also said it would close two additional assembly plants, to be determined later this year, meaning St. Paul might yet be shuttered.

Rob McKenzie, president of United Auto Workers Local 879 in St. Paul, said, "We're pleased, but we are sad. Our hearts go out to the other members across the country today." He added, "We need a large investment here in the long run, but we are a viable plant and fully intend to get a new product out here."

McKenzie said he believes there are a number of reasons why the plant remained open, including that it is the lowest-cost plant that Ford has, that it is a very efficient plant, and that it has been under budget for three years in a row. In addition, the plant has its own low-cost hydroelectric plant and "an excellent workforce."

He said the UAW's national leadership has given Ford an option to make St. Paul a "green" plant in a proposal last week.

During a news conference across the street from the St. Paul plant, U.S. Rep. Betty McCollum applauded the union's proposal to make the Ford plant more environment-friendly.

"We will do everything possible to make this happen," St. Paul Mayor Chris Coleman added. "We're going to continue to work with the plant and with the company, and we hope to get out of this cycle where every couple of years we're left to wonder what's going to happen at the plant."

Because sales of Ford's Ranger compact pickup truck, which is made only in St. Paul, have dropped sharply, the future of the plant has long been in doubt. The plant employs about 2,000 workers and is one of the oldest in Ford's stable.

Ford said the cuts announced Monday will reduce total North American employment by 25,000 to 30,000 people by 2012. This is in addition to previously announced cuts of about 4,000 salaried positions in the first quarter of 2006 -- or 10 percent of salary-related costs -- and a reduction in the company's executive ranks by 12 percent by the end of the first quarter.

In all, a total of 14 facilities, seven of them assembly plants, will cease production by 2012, Ford said.

"We will be making painful sacrifices to protect Ford's heritage and secure our future," Chairman and Chief Executive Bill Ford said at the Detroit news conference. "Going forward, we will be able to deliver more innovative products, better returns for our shareholders and stability in the communities where we operate."

Mark Fields, head of Ford's North American operations, said the company must adopt "a change or die mentality" and act as a smaller, more agile company. One initiative will be to convert 75 percent of the company's North American plants to "flexible manufacturing" by 2008, so that plants can switch more quickly and easily from making a slow-selling model to a car or truck that's in demand.

The planned plant closings will reduce manufacturing capacity by about 1.2 million units, a 26 percent reduction, by the end of 2008, Fields said. The company gave no details on when it would announce the decision on the other two assembly plants to be closed, or what criteria would be considered.

Fields also said that Ford's plans envision building a new, low-cost manufacturing plant in North America "at a location to be determined later."

Ford's last restructuring occurred just four years ago and took away five plants and 35,000 jobs. However, the automaker has continued to lose ground since then.

Last year, Ford for the first time in 19 years ranked second to GM's Chevrolet as the best-selling brand. And Ford's market share has slipped to 17.4 percent, down from 24 percent in 1990.

Minnesota Gov. Tim Pawlenty, who led a delegation to Detroit earlier this month to make the case for keeping the St. Paul plant open, acknowledged at a Capitol news conference Monday morning that Minnesota is not out of the woods. However, he credited the efficiency of the plant's workers and its environment-friendly hydroelectric power as possible factors that have worked to keep the plant open so far.

Pawlenty said state officials will continue to work with Ford to push for changes, such as the use of renewable fuels and renewable technology, that would ensure the viability of the plant. Minnesota is the first state in the nation to adopt an ethanol standard and a biodiesel mandate for fuel.

"A state or local unit of government can't chase around industries and subsidize them all on the theory that we're going to insulate them from changing world market forces," Pawlenty said. "However, we can and should engage them in partnerships where it makes sense for the future of the company and the state."

Matt Kramer, commissioner of the Department of Employment and Economic Development, has been leading the discussions with Ford and said the automaker has emphasized that it is interested in long-term partnerships rather than short-term infusions of cash.

"The solution is not throwing money at the Ford Motor Co.," Kramer said.

Staff writer Mark Brunswick contributed to this report.