Ford Motor Co. announced last night that it will close permanently a large-car asembly factory in the Los Angeles area, as auto industry figures indicated that more than 200,000 employes nationwide will face layoffs next week.
The layoff total -- 145,300 out of work indefinitely and more than 70,000 persons afected by short-term plant closings -- is the highest since 215,000 auto workers were out of work indefinitely during the 1974-1975 recession.
The Ford decision to close its Pico Rivera, Calif., factory will put 1,670 persons there out of work. Opened in 1957, the plant has produced full-sized Ford cars since 1959. Since the start of the 1980 model year, the factory has been producing only Ford's large LTD.
Coupled with a surprise announcement by General Motors Corp. yesterday that the home Cadillac plant in Detroit will be closed next week for the first time in about six years, the Ford decision indicates that the industry is being force to cut back on production of larger cars.
Auto sales overall have declined steadily for nine months, although sales of smaller, fuel-efficient have remained high. For some autos, such as the Chevolet Citation, there are long waiting lists at many dealers.
GM-Chevolet division chief Robert Lund said this week his firm has 225,000 orders for the Citation "and we are running full tilt on two shifts at three plants" to produce the front-wheel-drive cars.
Marvin Runyon, Ford vice president for body and assembly operations, said the decison to close the LTD factory was based on a "shift in public demand from larger to smaller cars." The plant will be shut at the end of business on Feb. 8, he said.
Ford's action represents the second recent closing of a major assembly plant; Chrysler Corp. turned out its last car at the old Hamtramck plant in Detroit last Friday.
Although Ford is the nation's second-largest domestic manufacturer of autos and generally is much more healthy than Chrysler, Ford has suffered losses from North American operations in recent months. William Bourke, executive vice president for North American operations at Ford, forecast during November that his firm would lose $1 billion on car and truck production in the U.S. and Canada this year and possibly next year as well. p
Chrysler, deep in debt and close to running out of cash, is the object of an attempted rescue that consists mainly of government loan guarantees and wage cuts by its workers.
Runyon, of Ford, said production workers at the Los Angeles plant may receive supplemental unemployment benefits for up to a year, while white-collar employes may receive up to a year's pay after the 1,419,500th and last car is produced next month. Auto industry supplemental payments, when added to unemployment compensation, produce about 95 percent of a worker's base pay.
Ford will continue to operate 25 assembly plants in the U.S. and Canada, including three that will continue to turn out LTDs. The company last closed a plant in 1970, in Dallas.
Only six of Ford's plants will be open next week as the industry's worst slump since the 1974-1975 recession appears to be deepening.
GM now has 71,200 persons on indefinite layoffs; Chrsler, 35,900, and Ford, 37,000. Auto sales are about 20 percent below year-earlier levels, and the automakers are building only 112,680 cars this week -- the first full week of 1980 output -- down 39 percent from 1979, according to Automotive News.
Ford also will stop light truck production next week at its Norfolk factory and in other locations. Crysler's factory in Newark, Del., will be shut for retooling.
Philip Caldwell, Ford president, pointed to the type of action taken yesterday in a recent review of the industry. "One uncertainty that has plagued the auto industry in recent years is behind us," he said. "It is now clear that in the 1980s American consumers will want and buy smaller, more-fuel-efficient cars and trucks."