Not that we're cutting Ford any slack, but the automaker's plan to shrink itself both in sales and size is a smart move. It will mean lower sales and lots of layoffs, but right now the market isn't buying a big Ford. So news today of the automaker shuffling some shifts and delaying the restart of a plant, while not welcome news for the 2,500 employees affected, is the right thing to do. The reorganization involves the Chicago and Louisville assembly plants, which will both reduce production to one shift starting in the summer. The Ford Taurus, Taurus X, Mercury Sable and upcoming Lincoln MKS are all built in Chicago, while the Louisville plant assembles the Explorer, Sport Trac and Mercury Mountaineer. Curiously, the reduction of shifts will not affect the number of each model produced. It will basically allow Ford to build the same number of vehicles with less resources, i.e. labor.
The other plants involved are Cleveland Engine Plant #1 and #2, which produce the 3.5L Duratec V6 and 3.0L, respectively. Engine Plant #2 will also switch to one shift this April, while Plant #1, which has been idle since May 2007, will not resume production this spring as intended, but rather sometime in Q4 of 2008. Fans of the 3.5L should not fret, however, as Ford's Lima, OH plant continues to churn out the big V6.
As for the 2,500 affected employees, Ford is reminding them that retirement and buyout packages are still on the table if they don't want to deal with all this down time anymore.
[Source: Ford, Photo by Scott Olson/Getty]
FORD ANNOUNCES CAPACITY ACTIONS FOR CHICAGO AND LOUISVILLE ASSEMBLY PLANTS, CLEVELAND ENGINE PLANTS
- Ford will reduce to one shift its operations at Chicago Assembly Plant, Louisville Assembly Plant and Cleveland Engine #2 and delay restart of production at Cleveland Engine #1 until the fourth quarter of this year.
- The plant actions are consistent with Ford's plan to align production capacity with customer demand and changing product mix as it works to return its North American operations to profitability.
- As previously announced, Ford is currently offering its U.S. hourly workforce the opportunity to take an enhanced buyout or early retirement package.
Chicago Assembly Plant and Louisville Assembly Plant will operate on one shift beginning this summer. The date for the shift reduction has not been finalized. Cleveland Engine Plant #2 will operate on one shift beginning in late April. Additionally, Cleveland Engine Plant #1, which has been idled since May 2007, will resume production in the fourth quarter. The company had planned to resume production resume this spring.
The change to a one-shift production pattern does not affect production volume. Rather, it allows the plants to operate more efficiently by running continually and reducing "down weeks." Approximately 2,500 employees will be affected at the three plants.
"We remain focused on our plan to return the North American automotive business to profitability," said Mark Fields, Ford's president of The Americas. "These actions are necessary as we align our capacity and product mix to meet real customer demand."
Ford is currently offering its U.S. hourly workforce the opportunity to select from one of 10 retirement and buyout packages, including special offers that provide money for education and a new entrepreneurial package that offer employees interested in starting a business a lump sum payout and family health insurance coverage. Ford also enhanced its package offering for retirement-eligible employees.
"The buyouts and capacity actions are designed to ensure that our manufacturing facilities are operating in the most efficient way," said Joe Hinrichs, group vice president, Global Manufacturing. "By adjusting our operating patterns in this way, we can produce the right volume and avoid down weeks. The stability in operations is better for our employees, our suppliers and the quality of the product."
The Chicago Assembly Plant, opened in 1924, currently builds the Ford Taurus, Taurus X, Mercury Sable and will be home to the all-new 2009 Lincoln MKS, which will arrive in dealer showrooms this summer. It employs approximately 2,300 workers. The plant is slated to receive an additional new product as outlined in the 2007 UAW-Ford Collective Bargaining Agreement, which expires in 2011.
Opened in 1955, Louisville Assembly Plant produces the Ford Explorer, Explorer Sport Trac and Mercury Mountaineer. It currently has approximately, 2,200 employees and is slated to receive an investment in a new body shop and a new product as outlined in the 2007 UAW-Ford Collective Bargaining Agreement, which expires in 2011.
Opened in 1955, Cleveland Engine Plant #2 produces the 3.0-liter engine. It employs approximately 800 employees. Cleveland Engine Plant #1, which opened in 1951, produced the Duratec 3.5-liter engine until it was temporarily idled in May 2007. Production of the 3.5-liter continues at Lima Engine Plant.
Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles in 200 markets across six continents. With about 245,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo and Mazda. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford's products, please visit www.ford.com.