More than 1,700 employees at Ford Motor Company's Batavia transmission plant will be affected under a restructuring plan the automaker announced on Monday.

As expected, the plan entails the elimination of 25,000-30,000 jobs - as much as a quarter of its North American work force - and several plant closings slated between 2006 and 2012. The company said it would idle a total of 14 manufacturing plants, with the Batavia operation among seven that will be shuttered by 2008.

Other operations slated for closing in the short term are assembly plants in St. Louis, Atlanta and Wixom, Mich., the company said. The Windsor, Ontario casting operation and two other plants to be named later will also close by 2008. Another seven plants will be idled by 2012.

"As hard and painful as it is to idle plants and reduce our work force, we know these sacrifices are critical to set the stage for a stronger future," Anne Stevens, executive vice president and chief operating officer, The Americas, said in a statement. The company anticipates a total of $470 million in savings this year alone through the employee cuts and fixed asset write-offs.

Ford's announcement follows restructuring plans unveiled last year by the Delphi Corporation, a large automotive parts supplier (See Gongwer Ohio Report, November 3, 2005), and General Motors Corp. (See Gongwer Ohio Report, November 21, 2005) that are also expected to impact thousands of Ohio jobs. Additionally, the Dana Corp. announced it was moving about 100 workers based in Lima to a plant in Mexico. (See Gongwer Ohio Report, October 20, 2005)

Governor Bob Taft's administration and the GOP-led General Assembly recently proposed broadening tax credits and other incentives to save automotive industry jobs for the state, which continues to struggle economically in part due to its historically large manufacturing base. The budget bill ( HB 66) elimination of the business tangible personal property tax and the creation of a new commercial activity tax were also touted as being especially beneficial to the manufacturing sector, however the automotive industry in particular continues to shed jobs in Ohio and elsewhere.

Policy Matters Ohio, a non-profit research institute, said Friday that state employment data shows Ohio has lost 17.6% of its manufacturing jobs since 2001, when nearly a million workers were employed in the sector. Overall, the state added just 3,600 jobs of all types in 2005, a figure that equates to less that one-tenth of one percent of the entire job market of more than 5 million.

Gov. Taft said in a statement of Ford's announcement, "I share the disappointment of those workers and their families that will be affected by the closing of the Batavia transmission plant. I am heartened, however, that Ford has decided that the more than 13,000 Ohio employees in the remaining nine Ohio facilities will be a part of their rebuilding efforts.

Area Reps. Joe Uecker (R-Loveland) and Danny Bubp (R-West Union) issued statements expressing frustration with the Batavia plant closure considering the economic incentives that have been provided to the company and the investments that have been made in the plant.

"I am very concerned for the future of those workers. Like others, I too have several relatives who are employed at this plant who I will worry about," Mr. Uecker said. "In the coming months I will work with whatever teams that form to help ease the burden this has brought about and I will continue to work with the legislature to search for ways to help Ohio's manufacturing future."

Sen. Tom Niehaus (R-New Richmond) said he would continue to urge the company to invest in Clermont County beyond 2008.

Chairman and CEO Bill Ford said in announcing the plans that the company expects to return to profitability within two years.

"The automotive market in North America is rapidly becoming as crowded and fragmented as other global markets," he said in a news release. "To meet this challenge, we are acting with speed to strengthen the Ford, Lincoln and Mercury brands, deliver the innovation customers demand and create a business structure for us to compete - and win - in this era of global competition.

"We will be making painful sacrifices to protect Ford's heritage and secure our future," Mr. Ford added. "Going forward, we will be able to deliver more innovative products, better returns for our shareholders and stability in the communities where we operate."
 

Gongwer News Service  1/23/2006  Volume #75, Report #14

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