Ford to lay off 700 at Michigan Assembly plant in Wayne

Ford said today that it is planning to cut a shift at its Michigan Assembly Plant where it makes the Ford Focus compact car and C-Max crossover because of declining sales of small cars, hybrids and electric vehicles.

The automaker told workers and notified the state of Michigan that it will lay off 700 workers, starting June 22. The decision affects 675 hourly workers and 25 salaried employees who make the Focus, Focus ST, Focus Electric, C-Max hybrid and C-Max Energi plug-in hybrid at the Wayne plant.

The first 200 workers will be laid off in June, another 200 at the end of July and the remainder at the end of September.

Ford expects that the first 200 laid-off workers will be redeployed quickly across the roughly 15 assembly, stamping, engine and transmission plants in southeast Michigan, filling in for workers on vacation, said Ford spokesman Kristina Adamski. Salaried workers will also be transferred to other locations.

The automaker has had 10 weeks of downtime in the past year to try to reduce the growing inventory of cars made at Michigan Assembly. Other alternatives such as keeping all the full 4,700 hourly and 250 salaried workers and implementing rotating layoffs were ruled out because the expectation is that all the laid off workers will be redeployed over the next year, Adamski said.

"All our other plants are doing well," Adamski said. "We can't build enough trucks or SUVs."

But consumers are not buying what Michigan Assembly is making.

Sales of the Focus fell 14.5% in March while sales of the C-Max Hybrid fell 22%. For the quarter, the C-Max hybrid is down a whopping 31%.

"We need to make sure we are building the cars people are ordering," said Adamski. "We are adjusting production capacity to meet demand."

Low gasoline prices have hurt small vehicle sales industry-wide. As a segment, these smaller vehicles represented 18.5% of the U.S. market in the first quarter, down from 20% a year ago. It is the lowest share since 2009. And electrified vehicles as a whole are down 16% in the first quarter.

"While today's announcement of a shift reduction at our Michigan Assembly Plant is unfortunate, it is not completely unexpected," said Ford UAW President Jimmy Settles. "We are reminded from time to time that our industry is cyclical and volatile to market conditions."

"Fortunately, through collective bargaining we have been able to negotiate provisions throughout the years that allow protections for our members adversely affected by production reductions," Settles said in a statement. "It is expected that nearly all of the displaced members will return to active employment at other southeast Michigan locations. Some, as soon as this summer, and all by early 2016.

"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," Settles said.

Adamski said the shift could be restored if demand warrants and the decision to cut workers was not made lightly, nor is it a pre-bargaining move as the automakers head into national negotiations to replace the current contract that expires in September.

Ford has added more than 14,000 jobs in the U.S. during the current four-year contract, exceeding a promise to create 12,000 jobs over the life of the agreement. The automaker has also centered much of its investment in trucks and utility vehicles including new body shops to make the 2015 F-150 pickup with an aluminum body.

Contact Alisa Priddle: 313-222-5394 or apriddle@freepress.com. Follow her on Twitter @AlisaPriddle