Ford to cut a shift at Michigan Assembly Plant
Ford Motor Co. is pulling the plug on a shift at its Michigan Assembly Plant amid slumping sales for small cars, electrics and hybrids.
The Dearborn automaker on Thursday said it will indefinitely lay off 673 hourly employees and 27 salaried employees on the "C Crew" at its Wayne plant starting June 22.
"Ford will be working to redeploy affected hourly employees and they will be considered first for southeast Michigan opportunities as they become available," the automaker said in a statement. The first will be deployed as summer vacation fill-ins.
Affected salaried employees will be transferred to other Ford facilities.
Ford's move follows General Motors' intention to lay off 610 workers at two Michigan factories because of lagging demand for small cars.
Fiat Chrysler Automobiles, meanwhile, has stuck with its strategy of producing fuel-efficient internal combustion engine cars.
Sales of Ford's Focus — both the regular and hybrid versions — were down 14.5 percent last month compared to the same time a year ago, and sales of its C-Max Hybrid were off 22.9 percent. The Wayne factory where those vehicles are made currently employs about 5,100.
"There definitely is some cause for concern," said Kelley Blue Book analyst Akshay Anand. "There's a lot of great EV deals out there but they may not be hitting the meat of the market of what consumers want."
The Michigan Assembly layoff announcement came a week after Ford announced $2.5 billion in new transmission and engine plants in Mexico — a move that United Auto Workers President Dennis Williams blasted. A buildup in Mexico as layoffs are underway in the U.S. could be another sore spot in contract negotiations with the UAW, which begin this summer.
"It's very interesting when you cut a shift in a place like Detroit, but all these companies are talking about expanding some of their base products in Mexico," Anand said. "I think it will be interesting to see how that plays out in (UAW contract) negotiations."
In a statement Thursday, UAW-Ford Vice President Jimmy Settles called the layoffs unfortunate, but not unexpected.
"We are reminded from time to time that our industry is cyclical and volatile to market conditions," he said. "The UAW has a successful history of negotiating layoff, transfer and job security provisions that have protected tens of thousands of workers in our history."
Other automakers also have experienced sluggish EV sales.
Sales of new electric cars and hybrids, according to automotive research and shopping site Edmunds.com, are at their lowest level since 2011 — the first full year of sales for the groundbreaking Chevrolet Volt plug-in hybrid and Nissan's all-electric Leaf.
Even with $7,500 in federal tax credits and other incentives, automakers such as General Motors Co., Ford Motor Co. and Nissan have dropped prices in an attempt to move their new hybrids and electrics. Cadillac became the most recent to reduce the sticker on an electric car, when it whacked $9,000 off its ELR plug-in hybrid last week.
In January, President Barack Obama came to the plant to tout the resurgent American automotive industry, even as the plant was closed that week because of lagging demand for its small gasoline-powered and hybrid cars. Ford made the decision to close the plant to reduce supply of small cars before the White House approached the company about holding the event.