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Continued: St. Paul Ford plant may get reprieve

  • Article by: DEE DEPASS , Star Tribune
  • Last update: June 26, 2008 - 6:22 AM

Ford Motor Co. officials are reportedly studying plans to keep the Ford Ranger plant in St. Paul open longer than its scheduled fall 2009 closing date, a source with knowledge of the situation said Wednesday.

Skyrocketing gas prices, stricter emissions standards and the renewed popularity of the compact and fuel-efficient Ranger truck have conspired to potentially breathe new life into a doomed 80-year-old factory -- if the financial terms can be worked out, said the source, who spoke on the condition of anonymity.

Officials are considering a two-year extension on the plant, the source said. But the dated, 25-year-old Ranger truck would have to be remodeled and that's likely to demand a costly plant overhaul and a new fuel-efficient design.

And big questions remain. Would the refined Ranger sell? Would it remain competitive as other automakers race to provide the most fuel-efficient vehicles? (Consider that Honda just introduced a hydrogen fuel car).

Still, this latest whisper of hope for the plant is welcome news and comes after two years of pleading by union officials, the mayors of St. Paul and Minneapolis, Gov. Tim Pawlenty and a long list of Minnesota legislators.

Some suggested turning the Ranger truck into a hybrid, plug-in or biofuel vehicle to salvage the plant.

The plant employed 2,100 workers in 2005 and now has just 1,060 employees. The night shift was axed and hundreds of workers were bought out of their contracts in January 2007. The plant was initially scheduled to shut this year.

Back in 2006, Pawlenty flew to Dearborn, Mich., to meet with Ford officials and he wrote repeatedly to CEO Alan Mulally. Sen. Norm Coleman, R-Minn., joined the fight as recently as a few weeks ago, also traveling to Dearborn.

In between, the plant won one temporary reprieve, as Ford officials agreed to postpone its closing date by one year to September 2009. That extension came as free-falling sales of the Ranger suddenly surged upward last fall, in response to the falling U.S. dollar, strong Canadian sales and some U.S. consumers who were suddenly drawn to its better gas mileage.

All the rage

Before 2007, Ford's larger (and gas-guzzling) F-series trucks were all the rage, leaving the Ranger to sputter along with lackluster sales that fell 25 percent in 2006 and 20 percent last year.

Then came four-buck gas.

So far this year, Ford's car sales fell 5 percent while truck sales fell 15 percent. The gas-thirsty SUVs fell 30 percent. Pickups and vans fell 19 percent. Yet the lighter-weight "crossover" vehicle sales rose 8 percent.

Year-to-date sales of the Ranger trucks -- which are rated at 21 miles per gallon city and 26 mpg on the highway -- are up 2 percent so far this year.

The Detroit News broke a story Wednesday, citing an unnamed source, that the Ranger line might be given a reprieve and operate perhaps another two years. The Associated Press quickly matched it, also citing an unnamed source. But Ford officials in Michigan remained mum.

"At this time we have nothing more to say than what we have been saying. We have nothing to confirm at this point," spokeswoman Ann Marie Gatari said Wednesday.

"As announced, the plan at this point is to close the plant in 2009," Gatari said. "With regard to a new product, we just do not comment on speculation."

Market dynamics

Mulally said weeks ago that plans to close or expand several North American Ford plants were changing, given the market dynamics of the economy and rising gas prices that have suddenly stimulated demand for smaller cars and trucks -- and stalled sales of Ford's heavier trucks.

Ford now plans to idle an F-150 truck plant in Michigan and slow production of its Super Duty truck plant in Kentucky. It's adding capacity for its Ford Edge and Flex cars.

Minnesota officials responded to the news reports about the St. Paul plant Wednesday with cautious optimism. Pawlenty issued a statement saying he "is encouraged by Ford's continuing assessment."

Coleman said: "While no final decision has been made, reports that Ford is considering extending the life of the St. Paul plant is good news. ... Since my visit to Detroit, I have had an ongoing dialogue with Ford officials, and I am hopeful that within the near future we will know the fate of the plant."

"With $4 gasoline, we're in a different world than we were when the St. Paul plant was announced for closure two years ago," Coleman said. "In light of current fuel prices and increasing Ranger sales, there is a compelling case for keeping the plant up and running."

Wait-and-see mode

St. Paul Mayor Chris Coleman applauded the news that Ford might extend the life of the plant.

"Since before I was elected, I have been calling on Ford to keep the plant open indefinitely. We have been in constant communication with Ford, and we are thrilled with the news that a plant extension may be on the table," he said.

Roger Terveen, president of United Automobile Workers Local 879, said he's in a wait-and-see mode. The union's been fighting hard for an extension and has been on an emotional roller coaster for two years.

"Nobody said anything about us staying open longer than September of '09," Terveen said. "Nobody has said anything from the top -- not even from the international union."

"If some public officials step in and can pull a rabbit out of their hat and keep it open, that is great. But I'm not going to tell the membership that we're staying open. Right now, it's not true," he said. "It's all rumors and speculation."

Dee DePass • 612-673-7725

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