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Ford Workers May Find Going Tough Despite Improving Minnesota Job Market

Posted on: Wednesday, 7 December 2005, 15:00 CST

By Julie Forster, Pioneer Press, St. Paul, Minn.

Dec. 7--At first glance, it may not be a bad time to be losing a factory job. The state's job market is showing signs of life, after all, and manufacturers are hiring again.

Nationally, some 80 percent of manufacturers responding to a trade group survey complain that there's a shortage of skilled workers out there.

A seller's market? Not so fast.

If, as reports suggest, Ford Motor Co. soon announces plans to close its truck assembly plant in St. Paul's Highland Park neighborhood, experts say the 1,800 union workers likely face a tough task trying to land jobs that pay anywhere near what they're making now, not to mention offer a comparable benefits package.

"They are going to compete with the population in general, going after jobs that are, on average, far less lucrative," said Fred Zimmerman, a professor of engineering and technology management at the University of St. Thomas.

Both the Wall Street Journal and the trade publication Automotive News, citing unnamed sources, have reported that the St. Paul plant is among a handful of domestic assembly plants that will be targeted for closing under a sweeping restructuring at Ford.

Plans are expected to be presented to the Ford board this week, according to Bloomberg News.

State and local officials vow to continue the effort to keep the plant open. And Ford has declined to comment on reports beyond saying no final decisions have been made.

And even if the closing scenario is true, Ford workers will have a financial cushion that few other factory workers enjoy: a contract that mandates paychecks until late 2007, whether the plant is churning out Ford Rangers or not.

Regardless of timing, this reality is not expected to change: Production workers, now earning an average of around $55,000 annually, likely will have to take a pay cut.

Factory workers who lose their jobs tend to take a 10 percent to 20 percent hit on wages when they find jobs elsewhere, according to the Economic Policy Institute, a liberal economic research group in Washington, D.C. "The likelihood of getting the same in terms of a pension and medical benefits is obviously a lot lower," said Jared Bernstein, an Economic Policy Institute labor economist.

At one time, these jobs were the foothold into the middle class for workers without college degrees. They had the force of the United Auto Workers union behind them. Compensation was closely tied to the company's productivity and growth.

"These days it's much more about a de-unionized work force with little union power, and lots of pressure of globalization pushing back on the bargaining power of our work force," Bernstein said.

For the majority of workers, retraining will be the key to minimizing their economic hit. "In terms of job prospects, without further training, maybe specialized training, it is unlikely that they will be able to find work that pays that much unless they have other skills," said Oriane Casale, assistant director of the state's labor market research.

The Ford workers have a variety of skill levels. Some are plumbers, and toolmakers and carpenters. Others are licensed electricians who keep assembly lines running smoothly. Other Ford workers program robots that weld, paint truck bodies and even conduct quality control inspections.

The skills needed to program and control the automated systems are higher-level than the majority of production jobs and might easily transfer to another manufacturing plant.

The majority of jobs though are on the assembly line, installing dashboard gauges or engines.

Most of the workers have a high school education and on-the-job training focused on tasks within the walls of the Highland Park facility. "Those skills aren't readily transferable," said Craig Anderson, vice president of administration at St. Paul College, whose instructors train workers at the Ford plant.

One thing that won't be in short supply: retraining help.

The state's dislocated worker program has an annual budget of some $22 million. It offers help in putting together a resume, job leads and even money to cover the cost of an emergency car repair or a suit for that big interview.

If the Ford plant were to close, the state might bolster its retraining effort with additional federal money. Over the last several years, laid off Northwest Airlines workers have benefited from two such grants worth $12.5 million, which served 5,308 laid off workers at the airline and in related industries.

In addition, the idled Ford workers might be eligible for money through a program called Trade Adjustment Assistance, which pays for retraining and job search allowances to eligible manufacturing workers who have lost their jobs due to increased imports.

Despite the retraining opportunities, many workers who qualify don't take advantage of them because they need to start new jobs right away, or they just can't take off that much time.

The state gave back $3.8 million of additional federal money earmarked for displaced Northwest workers due to low interest in retraining.

The pay guarantee for Ford workers means they will have more time to retrain.

The retraining helps, particularly for people who have not conducted a job search for years, if ever. They face a job market they are not familiar with, not knowing how to look for jobs on their own or use the Internet to look for jobs, or put together a resume. "They need to know how to navigate the current labor market and market their skills," said Rick Caligiuri, director of Jobseeker Services, the state agency that includes the state's dislocated worker program.

Complicating matters is the fact that many of the workers are nearing retirement age. It's largely a male work force ranging in age from 40 to 59, according to state officials.

"They may have difficulty in getting retrained and they may not even want to be retrained at this point in their career," said Scott Anderson, a senior economist with Wells Fargo. Even for those that start out looking, if they don't find a job within a year, inertia sets in, he said. Some might just decide to stop working altogether and take an early retirement.

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Copyright (c) 2005, Pioneer Press, St. Paul, Minn.

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Source: Saint Paul Pioneer Press (St. Paul, Minn.)

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