Ford's latest plan: St. Paul plant will close in September 2009

The Ford Motor Co. plant in St. Paul is now slated to close in September 2009, union officials said Monday.

Meanwhile, Ford's latest sales report showed that demand for the Ranger was one of the few bright spots for the automaker in February. Ranger sales in February shot up 27 percent, to 7,431 units, from a year ago. Sales of the light truck, the only vehicle Ford makes in St. Paul, are up 24 percent, to 12,977 units, so far this year.

The St. Paul plant had originally been scheduled to close this year, but received a one-year reprieve after Ranger truck sales escalated, with much of the demand coming from Canada thanks to the fall in the U.S. dollar.

Ford was joined by General Motors, Chrysler and Toyota -- the biggest automakers in the U.S. -- in reporting overall poor February sales, with the companies citing rising fuel prices and a slowing economy.

The St. Paul plant is one of about 16 Ford plans to shut as it retrenches in an effort to adapt to a significant drop in market share. On Feb. 18, Ford offered a second round of buyouts to 54,000 hourly union workers nationwide and hopes that about 13,000 will sign up. The packages are worth $50,000 to $140,000 depending on years of service, age and package. Hourly production workers have until March 17 to apply.

Roger Terveen, president of UAW Local 879 in St. Paul, said that only about 200 out of 992 workers in St. Paul are eligible for the new buyout. Until Ford offered buyouts in 2006 and eliminated the night shift, the St. Paul plant's union membership had been about 1,800.

The local's officials learned of the new closing target date recently in a meeting with national UAW representatives.

"Primarily it's driven by the weak economy," said Mirko Mikelic, who helps manage $22 billion at Fifth Third Asset Management in Grand Rapids, Mich. "It's been difficult for people to refinance and get credit."

Sales decline was predicted

Last month's sales decline is the industry's seventh since June, reinforcing projections for sluggish sales in the first half of this year. Analysts forecast auto sales in the United States this year of about 15.5 million, the lowest since 1998.

Chrysler President Jim Press said last week that GM, Ford and Chrysler won't be able to block overseas-based carmakers from permanently holding more than half of the U.S. market as the three U.S. companies continue to cede share.

Honda and Nissan Motor Corp., the second- and third-largest Japanese automakers behind Toyota, boosted U.S. sales last month.

Ford car sales dipped 9.3%

Ford's slide to 196,681 sales was spurred by a 9.3 percent decline in cars. Gains for smaller models such as the Ford Fusion and Focus failed to offset shrinking demand for larger sedans such as the Ford Taurus and Crown Victoria. Truck sales were down 5.6 percent, including a 4.9 percent falloff in F-Series pickups and a 27 percent plunge for the Explorer sport-utility vehicle.

Ford reduced plans for North American second-quarter production by 10 percent to 730,000 and also said that later this year it will go to one shift from two at assembly plants in Chicago and in Louisville, Ky.

Toyota sold 182,169 vehicles in the United States in February. The Japan-based automaker was dragged down as dealers await full production of the redesigned Corolla. The Prius hybrid also fell. Toyota sold 14,400 Tundra pickups, up from 9,669 a year earlier.

Chrysler, No. 4 in U.S. sales, fell 14 percent to 150,093, paced by a 32 percent decline in its Dodge Grand Caravan and a 23 percent drop in the Jeep Wrangler SUV.