Ford Atlanta Plant Seeks Lease on Life

The fate of Ford Motor Co.’s assembly plant in Atlanta has helped turn up the temperature in the company’s already heated contract talks with the United Auto Workers.
Union officials from Atlanta said last week the company had told them they had no definitive plans to put a new product in the company’s award-winning Atlanta plant once its finishes building the current Ford Taurus and Mercury Sable models sometime near the end of the decade.

Last spring, Ford officials had openly discussed the possibility of building a brand-new assembly plant outside Atlanta to replace the current factory with a new, more flexible facility capable of building several different vehicles. But in June the company abruptly pulled the proposal for a new plant off the table. Instead, with the company about to open negotiations with the UAW, Ford changed course and told workers it had no definitive plans for building a new line of vehicles in the Atlanta area once the Taurus and Sable are gone.

While the Ford’s other Taurus plant outside Chicago is being retooled to build cars like the Ford Five Hundred and Freestyle, other models built from the same platform could be built in either Mexico or Canada where labor costs are substantially cheaper, union representatives were told.

UAW’s ire

UAW officials, who were already fighting to block Ford’s announced plans to shut permanently assembly plants in St. Louis, Mo. and Edison, N.J., had not made an issue publicly of the Atlanta plant’s future after the June meeting. Last week, however, the union officials began talking openly about the lack of a future product for the Atlanta plant and what it meant to the union.

“I’m upset about the fact that Ford Motor Co. plans to, first of all, not build in Atlanta, and then also to send that particular work to Canada and also to Mexico,” UAW International Vice President Gerald Bantom told Reuters.

It’s not unusual for manufacturers to withhold product announcements during negotiations in an effort to put pressure on the union. Ford officials played down the dispute, which some outside analysts said pointed to a wider rift between Ford and the union as the contract talks move towards their final phase.

Ed Lewis, a Ford spokesman, said he was not at liberty to discuss Ford’s specific plans for the Atlanta plant. “I’m limited as to what I can say,” he said. “But Ford does plan to maintain its presence in Atlanta,” Lewis said.

Other Ford officials noted privately that the company’s future product plan calls for selling as many as ten different vehicles from the architecture that underpins the company’s upcoming Futura (using the Mazda6 as a basis), and not all of the new products have been assigned to specific plants yet.

Reality contracts

The flap over Atlanta, however, illuminates one of the underlying realities in Ford's negotiations with the UAW this year. For two decades, Ford has prided itself on maintaining good relations with the union, but the company’s top management is now insisting on deep cuts in staffing. The company’s top negotiator has said publicly Ford has no choice but to follow up on the broad restructuring plan announced in 2002. One of the basic premises in the restructuring is a major cut in the size of its unionized work force over the next four years. Ford, which is also responsible for Visteon’s workforce, has thousands of workers who either are or will be eligible to retire in the new four years. The plan could wind up eliminating roughly 18,000 to 20,000 jobs at Ford and Visteon.

Moreover, the UAW already has allowed GM to go through a similar downsizing in the 1990s, severely weakening its case for blocking the broad cuts mandated by the 2002 restructuring plan.

Building more vehicles in Mexico and Canada also would help Ford become more competitive with GM. Both GM and DaimlerChrysler now build more vehicles in Canada and Mexico for sale in the United States. DaimlerChrysler has two plants in Mexico with capacity for more than 400,000 vehicles that account for roughly 17 percent of its North American output. And GM has three assembly plants capable of building at least 500,000 vehicles a year in Mexico, or about nine percent of its North American production. GM’s largest assembly complex in North America is in Oshawa, Ontario, which is capable of producing more than 700,000 vehicles annually.

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