23 January 2006
Finagling is Job 1
When General Motors announced its restructuring plan, word came down from Detroit that it didn't matter what kind of incentives were offered to keep, say, Oklahoma City Assembly open: what's done is done, and that's that.
The assembly plants which are speculated to be most at risk for closure are in St. Louis, Missouri; St. Paul, Minnesota; Atlanta, Georgia; St. Thomas, Ontario; Cuatitlan, Mexico; and most important to many of our readers, the Wixom plant here in Michigan. The reasons for targeting these plants have to do with their age, their product lines and their lack of flexibility. There's another reason which makes this round of cuts more like Survivor than previous rounds.
And that reason is, as a source from the inside of Ford's executive office told me earlier today, "we have to play the states against one another". Over the past week, as targets have popped up in the media, states and their leaders have been scrambling to offer tax credits and any other incentive from their individual economic development toolsets they may have to keep their plants up and running in their states.
Which is what happened with GM; the General subsequently rebuffed the states. The Ford situation apparently will be different:
[T]his is all part of Ford's strategy. Their goal appears to be to announce a number of facilities to close that is larger than the actual number they need to close to reach their targets. Then, as in Survivor, the states and their elected leadership will compete against each other to see who can put together the most valuable economic development incentive package possible.
And the least valuable, presumably, will be voted off the island. Will this work any better? Too early to tell.
Update, 11 am: Here's the official Ford announcement. This line at the bottom of the list of plants to be idled is the kicker:
Two additional assembly plants, which will be determined later this year.
At least as flexible as a Thunderbird ragtop going over a railroad track.Posted at 9:32 AM to Driver's Seat