Fate of Ford plant was settled a long time ago

The closing of Ford's Twin Cities Assembly Plant in St. Paul marks the end of an era in Minnesota's economic history.

But the day's arrival was inevitable. Long before the formal announcement in 2006, Ford executives had concluded the St. Paul plant wasn't worth saving.

I know there are some who fervently believe the St. Paul plant could have been kept open if the state of Minnesota had been more proactive, imaginative and willing to open its checkbook. In fact, when Ford announced a $1.1 billion investment at its Kansas City Assembly Plant last month, you could almost detect a collective sigh rising from certain corners of the Twin Cities, a lament that "it could have been us."

Not likely. By almost every measure, the sprawling 122-acre St. Paul plant had outlived its usefulness to Ford.

This is not a knock against the Ford workers in St. Paul. The plant was regarded as the most productive midsize truck plant in North America, requiring 19.06 labor hours per vehicle compared with the segment average of 20.33 hours per vehicle, according to the 2008 Harbour Report.

But labor productivity is only one of many costs that go into operating an assembly plant. The St. Paul plant is inefficiently designed and underutilized. It makes one model, the Ranger, that appeals to a shrinking number of consumers.

Contrast that with the Kansas City plant, which is closer to Ford's supplier network and makes both the Escape SUV and the bestselling F-150 pickup.

The Ranger's diminishing popularity didn't sneak up suddenly. Sales have been sliding since 1999. If Ford had been interested in saving the St. Paul plant, it would have made that decision more than a decade ago. Fitting it for flexible manufacturing would have allowed the plant to retool quickly to produce different vehicle models.

But that would have required a long-term investment of hundreds of millions, if not billions, of dollars. Ford chose instead to squeeze every remaining nickel out of its wheezing Ranger line. And maybe that was the only choice Ford had, given the turmoil of the past decade.

Nobody needs to be reminded of the declining fortunes of America's Big 3 automakers, but here's a condensed version of that story: Sixty percent of the 447 auto manufacturing facilities that were operating in 1979 have closed. Almost half of those closures occurred after 2004. During that same period, foreign automakers have invested $25 billion in U.S. facilities.

For most of the past decade, Ford lost money on every vehicle that it sold in the United States, even as its total share of the marketplace slid by almost a third. A well-timed decision to borrow almost $24 billion helped Ford avoid joining General Motors and Chrysler on their road trip through bankruptcy, but it didn't eliminate the need for a radical restructuring of the company's manufacturing operations.

Ford's Atlanta Assembly, which made the bestselling Taurus? Closed. Ditto for Norfolk Assembly in Virginia, Wixom Assembly in Michigan and St. Louis Assembly in Missouri.

Ford already had been closing assembly plants when it unveiled its "Way Forward" plan in 2006, adding seven more North American plants to the list. None won a reprieve. Ford also has sold or closed 11 of its component manufacturing plants in North America, and plans to sell or shut down the remaining four.

In the process, Ford also has shed almost 37,000 hourly workers. Employment at the St. Paul plant is less than half the 1,800 or so who worked there at the beginning of the decade. New labor contracts mean many of those workers don't make what their predecessors did.

Still, the loss of more high-paying manufacturing jobs will sting if for only one reason: They don't come back. All the talk these days about a manufacturing renaissance in the United States and the dire shortage of skilled manufacturing workers can't hide this ugly fact: The state's manufacturing payroll is 25 percent smaller than it was in 2000. That's 100,000 jobs, or more than 100 times the number of people currently working at the Ford plant.

So, yes, there are real problems with Minnesota's manufacturing sector. Solving them may require us to confront thorny questions about taxes, regulation, the quality of our workforce and the state's overall business climate.

Then there are the things that are beyond the control of economic development advocates. They include choices -- hardheaded and coldhearted alike -- that determined the fate of Ford's St. Paul plant.

ericw@startribune.com • 612-673-1736