SOURCE: http://business.financialpost.com/2011/09/09/ford-plant-closure-heavy-is-the-crown/ by Scott Deveau
Much like the cars being built on the assembly line at Ford’s St. Thomas Assembly Plant, the front lobby of the factory harkens to another era.
It looks more like a retirement home than a modern auto plant, with clusters of wing-backed, floral-print chairs surrounding coffee tables, and an old console television mounted on the wall.
There is no longer a receptionist. Instead, there is a computer with a staff listing and a telephone to reach them.
A resume box in the lobby no longer takes application, and instead is filled with the business cards of companies looking to recruit workers from as close as nearby New Hamburg, Ont., and as far as police garage in Knoxville, Tenn.
While the floors of most auto plants in Canada are clean enough to eat off, the St. Thomas facility carries the grime and wear of four decades worth of work that has seen millions of vehicles pass through its doors.
The last Crown Victoria ever built will roll off of the assembly line at the plant Thursday, marking the end for both the Detroit automaker’s iconic rear-wheel drive sedans and its 44-year-old factory. The St. Thomas, Ontario plant is in many ways an anachronism. Not only were the design of rear-wheel cars produced there — the Crown Victoria, Grand Marquis, and Lincoln Town Car — extraordinarily long in the tooth, so too were the manufacturing processes used to construct them.
It has been continued demand in recent years from police forces for the Crown Victoria Police Interceptor, as well as fleet sales of the Grand Marquis and the Lincoln Town Cars produced there that has kept the plant open well past its expiry date.
The St. Thomas plant has been earmarked for closure since 2009, when Ford announced it would shutter the plant as part of massive restructuring effort launched four years ago aimed at improving the profitability of the company.
St. Thomas is the 27th of the 28 plants slated for closure.
Ford, unlike its Detroit rivals General Motors and Chrysler, avoided filing for Chapter 11 in 2009 with the aid of $23-billion in private financing before the recession kicked in. Those funds have helped finance its restructuring since, including the consolidation of its remaining operations at its other facilities, including the one in Oakville, Ont.
Gareth Ford, manager of the St. Thomas plant got his start in St. Thomas in 1989 after his father-in-law-to-be recommended him for the job in its body shop. But at 59, Mr. Ford, no relation, says he’s not ready to retire.
He said he has been offered positions with Ford elsewhere, including in the U.S. But, like many of the 1,200 workers at the St. Thomas plant, is reluctant to move his family out of the area after shuffling them around throughout his career, and with his youngest of three sons still in high school.
“I don’t want to be part of another plant closure,” he said.
While the St. Thomas plant is certainly looking dated these days, it wasn’t always the case. In the 1990s, it won numerous awards for its quality and efficiency. But its fixed assembly line, which only allows vehicles built on the same platform to be produced on the line, has become a thing of the past at Ford, and at most automakers.
Modern auto manufacturing is now focused on so-called flex lines, which allow for three or four different kinds of vehicles to be produced on the same line at the same time, enabling manufacturers to react more effectively to market conditions.
At the same time, the so-called body-on-frame design of the cars produced in St. Thomas, where the sheet metal shell is affixed to a heavy steel chassis, is also no longer used by Ford’s cars. Instead, the new Taurus, Fiesta, and Focus are all built with the less expensive, lighter, and more rigid unibody design adopted by most manufacturers, where the car’s body also helps with its structural reinforcement.
Despite all of these significant shortcomings, Ford’s rear-wheel sedans still have a market. It’s just one that is quickly vanishing.
The Crown Victoria Police Interceptor produced in St. Thomas makes up nearly 80% of the front-line police vehicles across North America, including 1,100 of the 1,400 front-line cruisers used by the Ontario Provincial Police. Meanwhile, the streets outside of the Lincoln Center in New York City every night are still lined with Town Cars, a vehicle that remains the preferred choice for limousine and taxi companies across North America because of its roominess. The St. Thomas assembly plant was originally slated to close at the end of August, but a last minute order from the Middle East extended the life of the Crown Vic and the Ontario plant until Sept. 15.
“The Vic was a known entity. It’s a very tough vehicle,” said Supt. Mal Shivers, who oversees the OPP’s fleet decisions. “But there are some downside to that. In some cases, the new technology put into the new cars hasn’t necessarily been put into the Crown Victoria.”
Supt. Shivers said the OPP is currently deciding on what will replace the Vic, and is looking at two police interceptors produced by Ford that are based on the Taurus and Explorer platforms, the Chevrolet Caprice produced in Australia, and the Dodge Charger, which is produced in Brampton, Ont.
A typical police vehicle carries about 350 lbs of equipment, and need to be filled up on average about three times a shift at about $90 each time. The new cars are expected to be 25% more fuel efficient than the Crown Vics, which get about 14 m/g in the city and 21 m/g on the highway. At the same time, these older model of rear-wheel drive sedans have fallen behind modern efficiency and crash test standards. Before going out of production, they were only being sold as fleet vehicles for rental companies, police forces, taxi and limo companies, not at dealerships to the general public.
As a result, the number of vehicles produced in St. Thomas has fallen from nearly 236,000 in 2000 to 96,000 last year.
Despite the obvious drop off in sales, there has been a lot of finger pointing since the plant’s closure was announced.
It will no doubt serve as another major blow for the region, which is still reeling from Daimler’s decision to the shutter its Sterling Truck plan there in 2009, eliminating 2,000 high-paying manufacturing jobs and hammering the local parts suppliers.
Ford was once again the largest employer in the St. Thomas area as a result, and while 250 of the workers will be kept on until December to help with the decommissioning of the plant, there will be plenty of people struggling to find work.
The 635-acre plot of land it is situated on is an attractive bit of property, minutes from the 401 with rail access and its own water treatment plant. But Ford has yet to make a decision on its sale.
There are rumours that the site might be used to manufacture alternative energy technologies, such as wind turbines, or be converted to a biomass power plant or an industrial complex. But at this point, no decision has been made.
Making matters worse is that a number of Ford’s suppliers in the area, including Lear Seating, have also announced they will closing their own doors as a result of the plant’s demise.
The city of St. Thomas is already showing the effects of the job losses at Sterling with several of the stores on its main strip vacated or boarded up.
But St. Thomas mayor Heather Jackson-Chapman has not given up on jobs returning once the Ford plant is sold.
“We’re very optimistic that something will come in. But we know it’s going to take some time,” she said.
That will be little consolation for the workers who will lose their jobs this week. While the province and Ford have set up a crisis centre to help the workers find jobs, it will be a grind for those unwilling to relocate.
Scott Smith, CAW Local 1520 chair, puts the blame for the loss of the jobs squarely on the federal government. He said the CAW, in its previous round of negotiations, wanted Ford to build a new facility on the site for a smaller vehicle, and even offered a special contract for the St. Thomas workers to help reduce labour costs.
They were stonewalled, he said.
But Steve Peters, the local Liberal MPP for Elgin-Middlesex-London, argues Ottawa and the province also tried all they could to keep the plant open, including Ontario offering $150-million to Ford to help retool the plant. Those funds, however, eventually found their way to Oakville, where the automaker assembles the Ford Flex and Edge, and Lincoln MKX and MKT on its more modern flex line.
“Both the federal and provincial government made representations to Ford to try to persuade them to keep the plant open,” Mr. Peters said. “We went to meet with the Ford officials a year, or a year and a half ago, to make one last pitch. But their decision was made.”
Once the St. Thomas plant closes, Ford will employ roughly 6,000 workers in the country, compared to 10,000 at General Motors, 6,500 at Toyota, and 4,700 at Honda.
Tony Faria, a professor at the auto research centre at the University of Windsor, said it’s unlikely that the governments would have been able to dissuade Ford from closing the plant. The restructuring efforts were aimed at reducing excess capacity, and consolidating the remaining manufacturing at its more modern plants, he said.
“If Ford announces any plant in the U.S. that they’re willing or interested in going into for significant retooling for a future vehicle, or to preserve jobs, whatever state it is in is going to offer financing to cover part of those costs,” he added.
And while the facility had harnessed the best practises in lean manufacturing in the 1990s, that simply isn’t enough anymore, said David Cole, chairman of the Centre for Automotive Research in Ann Arbor.
Unless you can build three or four products on the same line, and have at least two, preferably three, shifts running, it is unlikely that an auto plant will survive, he said.
“The plant where [Ford] used to build the old Taurus and Sable was one of the most efficient plants in North America, and it’s gone. It’s under the runway at the Atlanta airport,” he said.
“The new manufacturing model is much more oriented towards being lean and agile, rather than just lean. Lean was the Sable and Taurus plant. But it wasn’t agile.”
