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Ford will lay off 700 employees in Michigan

Lagging sales of compact and electric cars are starting to take their toll on automakers. Ford said Thursday it intends to lay off 700 employees who work at the Michigan Assembly Plant in Wayne, MI, over the next five months. The plant makes Ford Focus and C-Max vehicles. Sales of both have stalled in recent months. The layoffs affect 675 hourly and 25 salaries employees, and will begin in late June and continue through September, according to paperwork filed with state officials. The company expects to re-hire the affected employees elsewhere and use them on temporary basis throughout the summer. Ford spokesperson Kristina Adamski said the affected employees will be "first in line" for other jobs at nearby plants, and UAW vice president Jimmy Settles said he expected all would be re-hired at other southeast Michigan factories by "early 2016." Although industry sales have remained high overall, the growth has come from SUVs and pickup trucks. Conversely, compact cars and alternate-powered vehicles like the C-Max have struggled to find customers amid cheap gasoline prices. Focus monthly sales fell 14.5 percent year over year in March, and C-Max monthly sales dropped 22.9 percent over the same period. It was less than three years ago that Ford hailed the Michigan Assembly Plant as a model for its future, one that would quickly adapt to market conditions through a more flexible assembly process. The plant was retrofitted at a cost of $550 million so that the same assembly line could install electric, plug-in hybrid or gasoline powertrains. Ford produces the Focus, Focus ST, Focus Electric, C-Max Hybrid and C-Max Energi here. At the time, company officials said the flexible line was a way to "not be trapped with dedicated one-trick-pony plants where you have under-capacity or over-capacity situations," said Jim Tetreault, Ford's vice president of North American manufacturing, in November 2012. But that's exactly where Ford finds itself as consumers have turned away from both compact and gas-sipping hybrids and electrics as gas prices have fallen to a national average of $2.49 per gallon, according to Thursday's AAA Fuel Gauge Report. One year ago, gas prices averaged $3.70 per gallon. In perhaps a melancholy twist, the Ford Expedition and Lincoln Navigator that were phased out at Michigan Assembly by the retrofit are once again the types of vehicles that are sought after by consumers.

Long winter means most automakers won't curb summer shutdown

A lot more happened during this latest brutal winter than days of snow and Netflix binges. Automotive sales took a battering. After all, going out car shopping when it's eleventy-billion degrees below zero isn't a good time.
Because of this Old Man Winter-induced sales slump, inventories are abnormally high as we head into the summer car buying season. That's led some analysts to predict that automakers will be more inclined to idle factories this summer, in a bid to trim some of the built-up inventory. Traditionally, American manufacturers offer up a two-week break in the middle of summer, although the burgeoning sales of the past few years have seen this practice become less popular.
"We're likely not going to see an acceleration this year," Jeff Schuster, a senior vice president at LMC Automotive, told The Detroit News. "We'll see production increases in 'pockets' but I don't know if it will be as widespread as in recent years."

Automakers tussle over owners of 'orphan' makes

When General Motors put down several of its brands in recent years, it also let loose thousands of brand-loyal customers who will eventually need another car.
R.L. Polk Associates estimates there are more than 18 million cars from 16 discontinued makes on the road today. Those "orphan owners" have sales-hungry competitors seeing dollar signs. GM is offering Saturn owners $1,000 cash toward a Chevy Cruze, Cadillac CTS or a GMC Acadia. Ford is giving its Mercury lease customers a chance to get out of their contracts with no early-termination penalty and offering to waive six remaining payments if they drive off in a Ford or Lincoln.
Edmunds.com research shows the efforts are paying off somewhat for GM, with 39 percent of Pontiac owners, 37 percent of Hummer owners and 31 percent of Saturn owners taking delivery of another GM-branded vehicle. But that leaves as much as 69 percent of owners going elsewhere. Ford, Honda and Toyota seem to be attracting many former GM owners.