Ford plant among those likely to close in 2006

6:28 PM, Dec 2, 2005   |    comments
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If only they could pass a law making people want to buy the Ford Ranger. News that Ford Motor Co. might shutter the Saint Paul plant where the Ranger is built spurred the governor and lawmakers to propose incentives aimed at keeping Ford in the state. But while incentives might help, auto experts said the plant has other things working against it, like its distance from suppliers in Detroit and, especially, the free-fall of the only vehicle the plant is currently configured to make. Ranger sales have dropped 24 percent during the first 11 months of this year, according to Autodata Corp. The St. Paul plant is one of five that Ford is thought likely to close under a plan being developed for announcement next month, the Wall Street Journal reported on Friday. Gov. Tim Pawlenty said he has been in regular contact with Ford officials about the future of the plant. He said they assured him on Friday that no final decision has been made. Pawlenty appeared willing to pull out the state's checkbook to keep Ford here. He proposed building a "Center of Excellence in Renewable Fuels" that would work with Ford and serve as a "scientific focal point for the production, processing, blending and use of renewable fuels across North America." The idea would be to develop vehicles that run using more corn-based ethanol that could then be made in St. Paul, Pawlenty spokesman Brian McClung said. Failing that, Pawlenty's letter said, "we would also be happy to discuss more traditional approaches for plant viability." McClung said the governor had in mind "incentives, tax credits, and similar economic development tools." House Speaker Steve Sviggum, the Legislature's top Republican, said he wouldn't rule out a special session to consider incentives for keeping the Ranger truck plant. "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." He said one possibility would be giving Ford the same tax incentives a few other businesses get under the state's JOBZ program, which currently excludes urban businesses. Senate Majority Leader Dean Johnson, the state's top Democrat, said he was hesitant to bail out a corporation, but he expressed support for Pawlenty's idea for a partnership focused on renewable fuels. Subsidies have helped other states land new auto plants, especially in the South. Soliciting such proposals might be exactly what Ford had in mind, if it's the one that allowed news of the possible plant closures to leak out, said David Cole from the Center for Automotive Research. He said the plant is fairly productive, but its future is hurt by its dependence on the Ranger line, an aging line of pickups that has lost out to fresher offerings. "It's a very competitive segment, and not a very profitable one," he said. The St. Paul plant opened in 1924, and ran at full capacity as recently as 2003, said Greg Gardner of Harbour Consulting, an automotive research firm based in Troy, Mich. He said it takes St. Paul workers an average of 20.8 hours for each Ranger they build, versus an industry average of 24.2 hours for light trucks. But it ran at only 83 percent capacity last year, and dropped even further this year as Ford furloughed workers for weeks at a time, he said. So far this year they have made just 105,300 trucks, down from 143,982 during the same period last year -- a dropoff of 27 percent. Ford worker Brad Jeppesen said rumors have been swirling that the plant could be closed, but most workers are just waiting to see what Ford decides. Jeppesen, 35, has been an assembler at the St. Paul plant for 13 years. "They're going to do what's best for the company, or what they think is best for the company," he said. Fred Zimmerman, a professor of manufacturing systems engineering at the University of St. Thomas, said Minnesota could end up losing the Ford plant because it hasn't spent money to keep it here -- and he saw that as a failing in the state's dealings with other manufacturers, too. "We don't go to our industry and say 'How could we work together to expand your industry in Minnesota?' We see them as a source of revenue," he said. "We will ultimately regret it." By Joshua Freed, AP Business Writer

(Copyright 2005 by The Associated Press. All Rights Reserved.)

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