Ford May Close 5 North American Plants

DETROIT (AP) -- Ford Motor Co. workers and local officials said Friday
they'll do everything in their power to keep plants open after a report
suggested Ford is considering closing five North American plants as part of
a major restructuring.
Lawmakers and union officials said they would pile on tax breaks or change
plant work rules to encourage Ford to stay. In Minnesota, House Speaker
Steve Sviggum, the Legislature's top Republican, said he wouldn't rule out
pushing for a special session to consider incentives for keeping a plant in
St. Paul.

"We're not going to let this go without a fight," he said. "We're going to
give every incentive we can to make sure these jobs are maintained."

The Wall Street Journal reported Friday that the nation's second biggest
automaker is likely to close assembly plants in St. Louis, Atlanta and St.
Paul under a still-evolving restructuring plan. It cited two unidentified
people familiar with the automaker's product plans.

The newspaper said an engine-parts plant in Windsor, Ontario, and a
truck-assembly plant in Cuautitlan, Mexico, also are slated for closure.

If Ford closes the plants, it would deal another blow to U.S. autoworkers,
already reeling from a plan announced last month by General Motors Corp. to
close 12 North American facilities and cut 30,000 jobs. The nation's car
manufacturers are suffering from declining sales, especially of sport
utility vehicles, even as the cost of labor and health care rises.

Ford shares rose 5 cents to close at $8.15 on the New York Stock Exchange on
Friday.

Together, the Ford plants cited in Friday's report employ around 7,000
people, according to Ford's Web site. Ford had a total of 122,877 North
American employees at the end of last year. The Dearborn, Mich.-based
automaker has around 324,000 employees worldwide.Ford has been struggling
with declining U.S. market share, high labor costs and excess plant
capacity. The company reported a $1.2 billion pretax loss in its North
American automotive operations in the third quarter.

Ford Chairman and CEO Bill Ford has said the company is working on a
restructuring plan and will reveal details in January. Bill Ford said in
October the plan will include "significant" job cuts and plant closures.

Ford is only using around 86 percent of its North American assembly plant
capacity, compared to 107 percent at rival Toyota Motor Corp. Ford has 23
assembly plants in North America.

"Obviously, we've indicated we will address our excess capacity," Ford
spokesman Oscar Suris told The Associated Press Friday. "We've been pretty
consistent in saying we'll share these plans in more detail in January.
Nothing is finalized."

The United Auto Workers refused to comment on the report, saying it is
speculation.

At the Ford plant in Cuautitlan, just north of Mexico City, said rumors
about downsizing have been floating around for some time, and the 750
workers there are willing to discuss labor changes to keep the plant open.

"We believe that we represent a good business opportunity for Ford," said
Juan Jose Sosa, the national representative for the Ford workers union in
Mexico. "We are open to considering reasonable alternatives ... and a better
use of labor," he said.

Danny Sparks, head of the local union at the Ford plant in Hapeville, Ga.,
near Atlanta, said the report of a possible closure came as a surprise.

"We're one of the most efficient plants Ford has. The Atlanta employees have
a long history of stepping up to the task at hand," Sparks said.

Chuck Moore, director of the Detroit-area restructuring firm Conway,
MacKenzie and Dunleavy, said the plants are the subject of speculation in
part because of the products they make.

The Atlanta plant makes the Ford Taurus sedan, which is scheduled to be
phased out next year. The St. Louis plant makes the Ford Explorer and
Mercury Mountaineer, two vehicles which have been struggling. Explorer sales
were down 30 percent in the first 11 months of this year despite an
extensive redesign, according to Autodata Corp.

The St. Paul plant makes the Ford Ranger pickup, which also saw sales fall
nearly 25 percent between January and November, and the Cuautitlan plant
makes the F-150 and Super-Duty trucks that could be consolidated elsewhere,
Moore said. Ford has four other plants that make the F-150.

GM's announcement got little reaction from Wall Street, in part because many
of the changes won't take place until after GM and the UAW negotiate a new
contract in 2007. Moore said Ford could get the same reaction unless its
restructuring plan takes effect sooner, although Ford also is locked into a
UAW contract that won't be negotiated until 2007.

Moore said Ford also has to make clear how it plans to stem its market share
losses. Ford's U.S. market share fell to 17.4 percent in the first 11 months
of the year, down from 18.4 percent the year before.

"Without stabilization of the market share, it's just going to require
additional cost cuts and additional closures," Moore said.

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