Following through on its warnings, Ford Motor Co. said Tuesday it will end one of two production shifts at its suburban St. Louis assembly plant after the end of this year, eliminating about 800 jobs, or more than 30 percent of the work force at the facility.
The Hazelwood plant employs more than 2,600 workers and makes the Ford Explorer, Mercury Mountaineer and Lincoln Aviator sport utility vehicles.
In 2002, Ford announced plans to close the factory by the middle of the decade, among other things citing declining SUV sales. Ford said it could save money by moving production of the Hazelwood-built SUVs to the automaker's newer plant in Louisville.
But the nation's second-largest automaker reversed its decision in September 2003 after a strong lobbying effort led by Gov. Bob Holden and St. Louis-area officials, including members of a task force Holden empaneled to get the factory off Ford's closure list.
Ford agreed as part of its latest contract with the United Auto Workers to keep the site open at least through 2007, though the company planned all along to eventually end the second shift and its estimated $60 million in payroll.
Originally planned for April of this year, Ford in February postponed that shift elimination "indefinitely" before notifying the plant Tuesday that the second shift would be jettisoned, effective Jan. 3.
"They knew from last September that we'd be taking it down to one shift; now, they know the timing," said Marcey Evans, a Ford spokeswoman.
The Louisville plant would be unaffected by the Hazelwood plant's staffing cutback, she said.
Sales of the Explorer — including the Sport and Sport Trac versions — this year through August were down 6.7 percent over the same period in 2003, according to Autodata Corp. Sales of the Mountaineer have slid 2.4 percent, while demand for the Aviator has slumped 18 percent.
Last week, Ford announced it had a sub-par August, saying overall sales of its Ford, Lincoln and Mercury brands fell 5.9 percent. Despite heavy consumer incentives, Explorer sales were 30,603, down 15.6 percent from 36,254 from August 2003. Demand for the Mountaineer tumbled 16.4 percent to 4,335, from 5,188. Sales of the Aviator plunged to 1,715, off 41.5 percent from 2,934.
Ford said it expects its North American factories to produce 830,000 vehicles in the fourth quarter, 70,000 fewer than during the same period last year.
"This announcement is not a surprise," said Patrick McKeehan, director of the Ford-Hazelwood task force. "We had such a run of good luck of late that we were hoping that both shifts would continue on.
McKeehan said additional details were sketchy, "other than the heads up that this is happening."
"Although we may not agree with the decision, I guess Ford's working on their long-term projections of what demand will be," he said.
