SAN FRANCISCO – Ford Motor announced the next step in its vast restructuring efforts Thursday when it said it will permanently close its Norfolk, Va., and St. Paul, Minn., plants in 2008.
“A decision to end production at a plant is not an easy one and I’m deeply mindful of the impact this decision has on Ford employees, families and communities,” said Mark Fields, president of Ford’s America’s unit. “Unfortunately, these are necessary steps we must take to move the business forward.”
The two plant closures will eliminate 4,318 union and salaried jobs, part of the 25,000 to 30,000 jobs Ford is seeking to shed.
Ford in January laid out plans to slash its work force and shut 14 manufacturing plants in an effort to slash $6 billion in costs by 2010 and restore its North America auto operations to profitability within the next two years.
Seven vehicle assembly plants were targeted for closure, including lines in Missouri, Georgia and Michigan. The Batavia Transmission plant in Ohio and Windsor Casting facility in Ontario were also named. At the time, Ford said two more plants would be idled but it hadn’t yet decided which ones.
The St. Paul plant builds the Ranger, Ford’s smallest pick-up, which has seen a steep decline in sales in recent years. Last month, Ranger sales fell 9 percent to 9,809 from March a year early.
In comparison, rival Toyota’s Tacoma saw a 15.5 percent increase from a year ago to 15,662 pick-ups while sales of the Nissan Frontier surged 36 percent to 8,433 trucks.
Ford also announced the closure of its Norfolk, Va., plant, which is one of many that manufacture its perennial best-seller, the F-150 pick-up truck.
When Ford first announced the details of its “Way Forward” plan earlier this year, it looked as if the Norfolk line would be spared and might even be the recipient of additional resources for upgrades.
But David Cole, chairman for the Center for Automotive Research, said Ford’s decision makes sense.
“These two would be prime candidates because of location, age and product,” he said. “There have not been any new products from St. Paul in a long time. When you see that, it’s not a good sign.”
As for Norfolk, he added that he expects the market for larger, gas-hungry vehicles, like the F-Series, to shrink as consumers flee to more fuel-efficient models.
“Even the F-150,” he said. “It’s been a very strong market for Ford, but it won’t stay as strong as it has been.”
Ford said closing the plant will not affect the capacity to build the flagship truck, thanks to flexible manufacturing at other plants.
Shares of Ford Motor added 1 percent to close at $7.35.