AFSCME 3357-HOF'S BLOG

Details Announced on Ford Restructuring Plan
a/k/a "Have you driven by an unemployed Ford worker lately?"

I posted yesterday about Ford's way forward. Today more details were announced. In addition to laying off 1/3 of the salaried workforce, Ford has targeted for buyouts approximately the same percentage of the hourly workforce. Buyouts will likely be similar in magnitude to those offered by GM, with cash payouts up to $140k per worker. Ford's stock went down $.51 per share yesterday, but I don't see why. It's not like this was a surprise. If investors lose their shirts on Ford and GM it's because they were asleep at the switch. Management has all but said that they are going to give large portions of the paper equity of the company to the hourly employers in exchange for buying out their contracts. In both cases, the cost of labor peace may be more than half the book value of the companies. In some ways, this may be labor's last hurrah. At least it's a hurrah.

No Luck for Norfolk, Its Trucks are Shucked

In addition to the layoffs disclosed earlier, Ford will be cutting two additional plants, one in Ontario and one in Ohio. It will be closing the Norfolk Virginian F-150 plant in 2007 instead of 2008. Ford is reducing capacity at the Ranger plant in St. Paul, Minnesota. According to Minnesota Public Radio, perhaps the only reason that Ford has kept the St. Paul plant open this long is that it relies on hydroelectric power from the Mississippi river, and since Ford owns the dam, it can essentially power its factory for free and sell the excess power on the grid. The Ranger pick-up is older than the hills, but since competitors have mostly deserted the market for small no-frills trucks, the Ranger lives on as a relic long after it should have been redesigned. St. Paul may be the assembly site for the Ranger's successor in 2009, but it appears that the plant will be idled for a significant period of time regardless of new product plans.

All of the Former Visteon Plants may be living on Borrowed Time
Plants are to be sold or close by the end of 2008

Ford has had the "For Sale" sign out on its former Visteon plants for a year or so now, but it's a buyer's market. At least it would be if there were any buyers. Ford reiterated that it plans to either close or sell all of it's Visteon plants by 2008. Personally, I'm skeptical of that date. Collectively those plants sell too many of Ford's parts for Ford to line up contingent suppliers in time to make to do production planning for 2008. Nevertheless, over the long term, it would behoove the local union leaders to be working with state business incubators on plans for local ownership. Otherwise, the workers at these plants can bid their jobs bye bye.

Where does this put AFSCME 3357? It looks like between the Ford cuts and the GM cuts, we're looking at the active worker base going down 1/3 or more during the next contract period, but the number of retirees may go down by only half that number. Caseloads for our attorneys may swing from high to low and back again as offices shrink and are consolidated.