Ford has delayed the addition of a third shift and hundreds of jobs at its Oakville assembly plant indefinitely because of an abrupt downturn in sales of crossover vehicles.
A senior spokesperson for Ford Motor of Canada Ltd. confirmed yesterday that the automaker halted the gradual launch of a third shift this week because of sliding sales of the Edge and Lincoln MKX crossover utility vehicles in the U.S. and Canadian markets.
“The Oakville assembly complex is delaying the introduction of the third shift indefinitely to better align production with unprecedented shifts in market conditions,” said Lauren More, Ford’s vice-president of communications.
The company has also cut back Saturday overtime production for its two shifts at the plant because of slowing sales.
Ford’s move comes only three months after the automaker announced plans for the extra shift and more than 500 new jobs in Oakville. Ford informed about 350 new workers this week not to report for orientation for the third shift over the next month even though the company had just recently recruited them.
“It has to be absolutely gut-wrenching for some of those people who left other jobs to join Ford and now have this happen,” said Bob Chernecki, a senior official for the Canadian Auto Workers union. “What do they and their families do now?”
The company started orientation this week for another 160 workers who transferred from the company’s engine operations in Windsor after being laid off there. They will remain and fill positions in Oakville that become vacant through attrition.
“We’re very thankful that Ford will proceed with the transfer and is absorbing us into the Oakville plant,” said Catherine Faubert, who moved with her husband and family from Windsor.
In response to the big shift in consumer preferences, industry sources say parent Ford Motor Co. will soon announce plans to import more subcompacts and compacts to the U.S. market from overseas and revamp operations in North America to produce smaller cars.
In Oakville, More said the chances of proceeding with a third shift in the short term are not good. The company also produces the Flex crossover model there. “We expect the economic environment in the U.S. in the second half of this year to remain severe,” she said.
Ford said in April that it would add a third shift in Oakville because the Edge and MKX models had gained strong traction in the U.S. and Canadian markets after debuting in 2006.
But the gradual move by consumers to smaller, more fuel-efficient models in the U.S. over the past year turned into a stampede in May and June as gasoline prices soared to record highs.
It triggered a collapse in sales of large pickup trucks and sport utility vehicles and also pulled down business for bigger models in the popular crossover segment.
In the key U.S. market, where Ford expected Edge business to continue growing, sales slipped 4.6 per cent to 32,693 during the second quarter from the same period last year, with signs of continuing deterioration. Edge sales plunged almost 20 per cent to 9,993 in June from the same month last year.
In Canada, Edge sales have risen 14 per cent to 3,853 in the past three months but are slowing down. Sales in June rose 2 per cent to 1,348.
Chernecki, assistant to CAW president Buzz Hargrove, said he isn’t optimistic that Ford will implement the third shift in Oakville for at least several months in view of the continuing upheaval in the North American auto industry.
“This is a reflection of rising fuel prices and an unprecedented flood of imports into Canada and the U.S.,” he added.
“The Harper government has to get off their position of ignoring the industry and start taking an active role to protect it before there is any further damage.”