Monday, December 05, 2005

Model "T" for "transition"

This past weekend's newspapers in the Twin Cities of Minnesota were dominated by news that Ford Motor Company may close its assembly plant in St. Paul which primarily produces Ford Ranger pickup trucks.

While this is not a final decision by Ford all the news reports and columnists suggested it was a "done deal" but Governor Pawlenty (R-Minnesota) stepped forward with a partnering proposal between the State of Minnesota (via the much respected University of Minnesota) and Ford Motor to convert this 1925 era factory into an "alternative-fuel research center" to tap into an apparent emerging consumer market for hybrid vehicles driven by high oil prices :) For more on Ford's hybrid outreach programs see my blog posting entitled "Petrol Police" for details.

It is a natural response for any governor to make an effort to save jobs -- in this case 2,000 jobs with a total payroll of $100 million in the Twin Cities -- so Governor Pawlenty is taking appropriate action so far assuming he does not use public money to subsidize the jobs. What concerns me most is that the Minnesota legislature might create a tax-free zone for the Ford plant -- the problem here as with governments across the board is that they wait until disaster is near then step forward with corporate income, property tax, etc. cuts to allow the company to retain money the government should have left with the company to reinvest, etc. over the years in the first place so companies like Ford can remain competitive in the global economy.

Maybe Governor Pawlenty's "alternative fuel" center is a good idea but what if this 1925 era factory can't be retro-fitted in an efficient manner then what should be the fate of the plant? Based on several articles I read numerous ideas for the plant's future are interesting which I have included below along with my own related observations on this economic story that I hope readers will utilize to generate the conversation we need in the Twin Cities:

  • Ford should sell the factory and land (122 acres in the prime neighborhood of Highland Park equivalent to 37 FOOTBALL FIELDS) to a real estate developer to create a mixed use, planned community. One article estimated that such a change in land use would generate an increase of 25% in property taxes to the City of St. Paul and Ramsey County.
  • How many of these 2,000 Ford employees have current resumes showing they are prepared for a job change if needed? I appreciated Edward Lotterman's column in the Pioneer Press entitled, "Use state money to retrain, not retain" (employees), but would offer a variation on this theme (by opposing more government spending). Since "education" receives the largest portion of the state budget and because loyal alumni support educational institutions with additional funds (such as my annual donation to the University of St. Thomas) we should call on the education establishment to simply "absorb" these 2,000 workers if needed on a tuition-free basis for a set period of time/number of credits as evidence of the education community's commitment to Minnesota taxpayers/alumni donors. Would someone at the Ford plant please create a career networking group TODAY (if still needed) to explore career options with each other? Another suggestion would be to enroll in the MBA program at St. Mary's University so workers can get involved in their "Do the Books" business book club -
  • Northwest Airlines needs replacement mechanics so perhaps some of these Ford employees could apply? Since this would pit one union's membership against another union this suggestion is probably impossible but the competitive benefit to the economy would be a plus. (see my earlier blog posting on "Northwest Airlines")
  • University of St. Thomas (UST) -- after reading 5 or 6 articles/columns on this story in 2 newspapers I did not see UST mentioned anywhere. As an alumni of UST I am biased I know but since UST needs room to grow given the residential housing/established neighborhood constraints on its future growth the Ford plant area would be an ideal location especially if a UST shuttle bus system could be created.
  • Ford union contracts -- one article mentioned that the current union contract requires all employees to be paid through 2007. Assuming Ford workers lacking Associate degrees or wanting to complete Bachelors degrees want to enroll as part-time students they have nearly two (2) years to complete their degrees while being paid for full time employment in order to develop new skills needed for a career change.
  • Ford Rangers -- this Ford plant has historically specialized in producing Ford Rangers and Mazda pick up trucks. One article included a graph depicting the ever decreasing sales of these trucks over the last several years. Perhaps they took action but no where did an article state that union leaders and management explored the option of producing alternative products which customers actually wanted to purchase. Does any evidence of this effort exist? To completely mis-quote Henry Ford's famous phrase -- "you can have any color of automobile as long as it is black............." may I suggest this St. Paul factory's mindset was -- "you can have any color you want as long as it is a Ford Ranger..........."
  • Sports Stadiums -- In all the articles I read I did not see any discussion of this plot of land being redeveloped to include sports stadiums. This is rather surprising since both the Minnesota Vikings and Minnesota Twins want open air stadiums which would easily fit in this space "large enough for 37 football fields" . If these stadiums aren't options then my personal wish is for the St. Paul Saints baseball club to build a river front stadium on the site as part of an overall planned neighborhood of family homes, condos, green space, access to the river, and perhaps a combination open air amphitheatre/library/museum complete with Ford memorabilia.
  • Mississippi River -- Assuming the Ford plant is closed or perhaps re-born as an alternative fuel research facility clearly all of the 122 acres of land it covers is not needed so this is an ideal time for the Friends of the Mississippi River,, to step forward as an active participant in the "solution" created should Ford officially declare this plant closed.
  • Estate Taxes -- I could not help but notice that on the same day that the newspapers had extensive coverage regarding the "$100 million payroll" at this Ford plant another story was published , "Estate paid a whopper tax: $112 million." This news story was about the late James Binger's family estate paying a $112 million estate tax to the State of Minnesota via one transaction this year!!! Congratulations to Mr. Binger for amassing such a fortune that generated such a windfall for the state government but do you not find it amazing that this tax bill EXCEEDED the entire payroll at the Ford plant?? I would much prefer for the Binger family to keep the $112 million so they could create a company based in Minnesota that would hire some/all of potentially displaced Ford employees but instead the State of Minnesota will use this one time payment to help close its current budget deficit thus avoiding the need to raise our taxes even more or cutting sacred cow programs which do not produce economic wealth like a "Binger Widgets Inc." would produce.

Quality is Job One,


1 comment:

Anonymous said...

What a well - thought out solution to a situation that is happening all across the country.

Reallocating resources, retraining and creating multi-purpose uses for land. Sound advice. When is Gov. P going to appoint you director of economic development?

You should REALLY look into that, sir!