Pause for effect: Iconic Ford SUV plant to be idled for summer

[marmar]

from Grist Magazine's Gristmill blog:



Pause for effect
Iconic Ford SUV plant to be idled for summer
Posted by Sara Barz at 8:05 AM on 19 Jun 2008


will close its Michigan Truck Plant in Wayne for nine weeks -- four weeks longer than previously announced -- starting on June 23. Birthplace to Lincoln Navigators and Ford Expeditions, the MTP has come in for hard times due to the plummeting market for SUVs. Since January, Expedition sales are down 31 percent; Navigators, 22 percent. Once bread and butter for American automakers, SUVs have fallen victim to $4-a-gallon gasoline.

To the lay observer, the temporary MTP closure is just another symptom of the shift away from SUVs, but it actually signifies a whole lot more for American automakers: At the height of the SUV boom in the late '90s, the MTP was the most profitable factory, in any industry, anywhere in the world.

Keith Bradsher, Detroit bureau chief of The New York Times from 1996 to 2001, wrote in his book High and Mighty: The Dangerous Rise of the SUV:

The factory's annual production was worth almost $11 billion -- greater than the global sales in 1998 for Fortune 500 companies like Northwest Airlines, CBS, Texas Instruments, Honeywell, and Nike ...

While Ford had 53 assembly plants worldwide, the Michigan Truck Plant accounted for a third of the company's entire profits.

That tremendous SUV wealth benefited not only the company, but the workers. At the height of the Expedition craze, unionized assembly-line workers at MTP earned as much as $100,000 a year (including overtime). Point of reference: Salary.com calculates (in 2008 dollars) that a similar worker in the 90th percentile earns just over $55,000 a year, with fewer chances for overtime.

As SUV production slows, automakers continue to ramp up production at car factories. General Motors announced Monday that it would add a third shift at its Lordstown, Ohio, plant, which builds Pontiac G5s (25/35 mpg) and suddenly desirable Chevrolet Cobalts (24/33 mpg).


http://gristmill.grist.org/story/2008/6/17/23458/2711