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Small towns brace for Ford fallout

Marketplace Staff Jan 16, 2007

Small towns brace for Ford fallout

Marketplace Staff Jan 16, 2007


LISA NAPOLI: Let the buyouts begin. Hourly workers at Ford Motor Company are beginning the ends of their careers. Buyout plans are going to effect starting this month. It’s not just the people who’ll be experiencing change. Consider the small town in Northeast Ohio called Brookpark. Here’s Mhari Saito of WCPN:

MHARI SAITO: As soon as you get off the highway exit for Brookpark, you hit Ford’s massive engine and casting plants.

They sit just down the road from Mayor Mark Elliot’s city hall office. Since Ford announced its voluntary buyout and early retirement plans, Mayor Elliott has been watching the situation closely.

MAYOR MARK ELLIOTT: For years and years now, Ford Motor Company has been the largest employer in the city of Brookpark, the largest revenue source for us as far as income tax is concerned. They are, these days, approximately 35 percent of our budget, so a reduction in force means less dollars to the community.

Elliot has reason to be nervous.

The last day workers could sign up, he got an e-mail from the United Auto Workers local office. It said nearly half of the plant’s 3,000 workers wanted out. That’s twice the number he expected.

ELLIOTT: I would say if there was a number around 700, probably would’ve been more what we were anticipating. So I was surprised, no question.

If all of those who signed up for the buyout here in Brookpark leave, it means $2 million less in annual income tax revenue. That’s 10 percent of the city’s annual budget.

ELLIOTT: We, in reality, have everything on the table and we’ll take a look at everything and see what we can do.

It’s a scene being repeated in towns home to Ford plants around the country. University of Michigan economist Don Grimes says whether workers will stay after the buyout is a wildcard for local officials.

DON GRIMES: And that’s probably the great unknown for people trying to do the budget projections, whether they take their retirement package or buyout package and stay in the local area or whether they pack up and move to another state or another town.

Workers who’ve committed to the buyout have until the last day of their employment to back out.

Tim Levandusky heads the United Auto Workers local in Brookpark. He says as many as 40 percent of the local Ford workers who have signed up are using it as a backup plan.

TIM LEVANDUSKY: Well just in case something happens, Ford makes another announcement. . .

How many Ford workers will really take the buyout wona€™t be known for months.

ELLIOTT: That’s the one unknown so far, that it is difficult. I certainly hope fewer go, but we don’t know that yet.

For now, Mayor Elliott’s wooing new employers to his town and preparing to trim his budget. He’s eyeballing roads programs and contract talks with city unions as places to save some money.

In Cleveland, I’m Mhari Saito for Marketplace.

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