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I thought the Norfolk plant was one of the best.

I read some other stories off of financial sites and in it Ford is saying that it's trying to become more flexible. It wants assembly plants that can switch from one kind of platform to another depending on market demand for the various models. Part of the Norfolk plants stellar efficiency is that it only builds one model. People become better with repetition. However, this doesn't fit Ford's new business model. Considering the age of the plant, I assume it would cost even more to retrofit it to build other models. It looks like Ford is shuttering the single platform plants and expanding its flex plants. Still, I'm holding onto my union conspiracy theory.

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The American Auto makers and the unions are the ones to blame for this one. The Japanese auto makers developed quality cars that would last forever while the Americans built cars and trucks on the 100,000 miles and you'll buy a new one buisness model. Well, people (me included) buy for quality and longevity. My 1999 Toyota has only needed a new battery and tires...that's it. One would be pressed to find a similar model american car with no problems. As for the unions, they've kept costs up with tremendous benefits and higher than average pay. The union's high standards and costs have prevented their american employers from competing. They stand in the way of progress and automation in order to prevent job loss. Well, closing a plant is one heck of a job loss if you ask me. My final swan song on this issue is that when GM closed all of those plants they did so without asking their shareholders to take a hit. They cut cost at the expense of their workers and not their investors. Everybody should take one for the team. This tells me that they're only out for the bottom line and really only see their employees as numbers & names, nothing else. Their commodities. Anyways, buy American, Buy Toyota or Honda...pretty soon they'll be employing more American than Chevy and Ford.

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It is bad news for Norfolk, but not for downtown. What taxes has Norfolk been giving away? I'm sure its citizens would be interested to hear that. As well, the assembly site in Norfolk is not heavily polluted because the plant has always been mostly assembly, and not fabrication which is much dirtier work.

Norfolk has been giving taxes away by building Nordstrom, parking garages and giving away land/incentives all over DT for redevelopment. Initially it was supposed to be a way of enticing businesses into DT. That has been accomplished and more work needs to be done to make sure that the city isn't giving incentives away that would be better put to us, the citizens of Norfolk (I am one by the way). Assessments have gone up very high this year and so have our taxes. I do not see a tangible benefit in the form of roads, library, etc.

I am not the only one who feels this way, as someone from city council stated in an article about the closing Ford plant:

Norfolk Councilman Anthony L. Burfoot said the city is going to have to "tighten up" when it comes to deals with developers. "We've got to start requiring premium prices for land sales," he said. "We can't do business the way we used to."

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The tax incentives are what makes cities attractive. They need to write better contracts with these companies to better protect themselves. Like they should have to turn the land over to the city if during the contract period they close shop. There is a way to cover themselves.

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In economic development theory, the giveaways cities offer to business create what is called a "zero-sum game," where most communities compete with one another to attract business, but in doing so they can't leverage much over one another because most if not all communities are giving away the store in order to get the business that they want. Norfolk has been no exception.

Now, there is could be a new danger of losing some of it's residential tax base if they don't role back the tax assessment levels with respect to what other local communities levy. Virginia Beach gained many Norfolk residents back in the 60s and 70s. Norfolk City Hall has got to be careful, because people will eventually move out if they perceive that they are being over-taxed for the meager services that they are getting from the City. I tell you, we are not celebrating life daily.

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"American auto manufacturers have very small margins on their passenger car sales"

Perhaps the margins are small because the corporate heads take home so much? Unlike personal computers, cars haven't gotten cheaper year by year. The prices have gone up. I'm skeptical that it's that difficult to profit on a $30,000 automobile. The Ford plant workers average $60,000 a year or something. That is two Ford vehicles (without getting into high-end expeditions, higher end Ford trucks for commercial use and what not).

Padman - the interesting thing is that the city will give these huge tax breaks to people like Jilians to locate an operation in Hampton Roads, yet the small mom and pop businesses get nothing of the sort. In the case of companies like Wal-Mart, they get huge tax cuts to come in and kill all of the small businesses. Pretty odd policy.

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"American auto manufacturers have very small margins on their passenger car sales"

Perhaps the margins are small because the corporate heads take home so much? Unlike personal computers, cars haven't gotten cheaper year by year. The prices have gone up. I'm skeptical that it's that difficult to profit on a $30,000 automobile. The Ford plant workers average $60,000 a year or something. That is two Ford vehicles (without getting into high-end expeditions, higher end Ford trucks for commercial use and what not).

Padman - the interesting thing is that the city will give these huge tax breaks to people like Jilians to locate an operation in Hampton Roads, yet the small mom and pop businesses get nothing of the sort. In the case of companies like Wal-Mart, they get huge tax cuts to come in and kill all of the small businesses. Pretty odd policy.

Not really when you think about the taxes the mom and pop place pays and the taxes a huge company pays

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"We will continue to make the case that Ford should reconsider this decision, or at least delay the scheduled date for ending operations at the Norfolk assembly plant," the governor said. "If that effort is not successful, my administration will work with the company, local and regional leaders, organized labor, and others to try to minimize the eventual impact of this announcement on the Hampton Roads community."

Also, start meeting with Nissan, Toyota, Mazda, Honda, Hyundai, Kia, BMW, VW, and Mercedes in hopes of luring them to this area. It may be easier said than done, but it's worth a try. If the state puts together a perfect deal I can't see why at least one of these automakers won't sign. These automakers have been building plants all over the south and we have yet to be in the running. If we put in as much or more of an effort luring an automaker as we do in luring a major league franchise we might be all right.

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"American auto manufacturers have very small margins on their passenger car sales"

Perhaps the margins are small because the corporate heads take home so much? Unlike personal computers, cars haven't gotten cheaper year by year. The prices have gone up. I'm skeptical that it's that difficult to profit on a $30,000 automobile. The Ford plant workers average $60,000 a year or something. That is two Ford vehicles (without getting into high-end expeditions, higher end Ford trucks for commercial use and what not).

Padman - the interesting thing is that the city will give these huge tax breaks to people like Jilians to locate an operation in Hampton Roads, yet the small mom and pop businesses get nothing of the sort. In the case of companies like Wal-Mart, they get huge tax cuts to come in and kill all of the small businesses. Pretty odd policy.

Yes, small businesses don't always seem to get a fair break. Maybe it's time to revise the old Enterprise Zone idea a bit and give it some more substance. America has never created true "free trade" zones, but has opted instead to provide some minor tax breaks and write-offs on new equipment for businesses that hire from job creation programs--little things like that.

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"American auto manufacturers have very small margins on their passenger car sales"

Perhaps the margins are small because the corporate heads take home so much? Unlike personal computers, cars haven't gotten cheaper year by year. The prices have gone up. I'm skeptical that it's that difficult to profit on a $30,000 automobile. The Ford plant workers average $60,000 a year or something. That is two Ford vehicles (without getting into high-end expeditions, higher end Ford trucks for commercial use and what not).

To get a $30,000 car at Ford, you need to buy a Crown Vic, its flagship vehicle. (Expeditions start at $35k) A Ford Fusion retails for $18,500 while a comprably equipped Camry retails for $21,250. Despite the Fusion's fairly good sales success, you'll still be able to negotiate a cheaper price than for a Camry. Don't forget all the incentives that American cars companies were throwing around a year ago. Foreign automakers weren't doing that.

Cars aren't supposed to get cheaper by the year because they are old technology. There's nothing new about them making the internal combustion engine obsolete and therefore in less demand. They've achieved their highest cost efficiency in terms production. As labor and materials costs rise and as new technology is incoporated, their price is bound to go up just as every other industrial item we use like washers and lawn mowers. Computers have held steady in price range for years now. If you want the latest components you're still going to pay $3000-4000. If you just one an everyday email machine, you'll pay $500. As new technology emerges, what was once in the $3000 machine will make its way into the $500 machine so that the $3000 machine remains cutting-edge. For a self-proclaimed techonolgy person, I think you'd know this.

Anyway, the reason profit margins on passenger vehicles are so slim is that assembly plant workers get paid upwards of $60,000 a year. That is ridiculous. The staff engineers who do the bulk of the car design work don't get paid as much.

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"American auto manufacturers have very small margins on their passenger car sales"

Perhaps the margins are small because the corporate heads take home so much? Unlike personal computers, cars haven't gotten cheaper year by year. The prices have gone up. I'm skeptical that it's that difficult to profit on a $30,000 automobile. The Ford plant workers average $60,000 a year or something. That is two Ford vehicles (without getting into high-end expeditions, higher end Ford trucks for commercial use and what not).

$30,000 sale price does not equal $30,000 profit. It is not only monetary compensation that adds to production cost (not even going into cost of materials, plants, marketing, R&D, etc). GM (Ford is in a similar position) now has 2.5 retirees for every one active worker, to whom they must pay the lions share of healthcare costs, as well as pensions.

Just about every major industry where there is still a heavily unionized workforce is in trouble. From the car manufacturers, airline industry, steel industry (only recently helped by China's insatiable appetite for the stuff), shipyard industry (no new ships are being built in the US except for the Navy).

The only two heavily unionized workforces, I can think of off the top of my head, that are in a relatively OK position is Boeing (thanks to significant union concessions and.... gasp!... globalization) and again, the steel industry is experiencing a temporary turnabout of its fortunes thanks to ..... gasp! globalization (though China and other developing countries are quickly building new steel producing factories).

No other car manufacturer that is presently in the south and using a non-unionized workforce is going to be stupid enough to take over a unionized facility. The best shot they have at saving the plant is for the commonwealth to give concessions to Ford, though even then I put it at slim odds of Ford reconsidering.

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Norfolk Ford plant dragged into state budget fray

Seems the state is good at screwing this area. We almost lost Norfolk and Southern over this!

Don't fall prey to the political rhetoric. The Norfolk plant is closing because Ford is not going to close plants in states with strong union laws. It's easier to close the Norfolk and St. Paul F-150 plants than the KC and Dearborn F-150 plants. Additionally, the latter two plants also make the Super Cab which Norfolk doesn't. Virginia has already provided tax breaks for Ford when they announced the $400 million expansion. The Commonwealth is not going to kill a major business (and tax payer) if all it will take is a couple million more in tax breaks. Thar assemblyman is exploiting the Ford situation to prove that tax cuts are needed. If that were the case, then why would Ford keep the Dearborn plant open. Michigan has a much higher business tax burden than Virginia. Check out this table from the Roanoke City Business Development Dept.

Business Tax Burdens by State (see Milken Institute Cost of Doing Business link at bottom of table)

Virginia is near the top of the list, meaning it has one of the lowest business tax burdens. The Tax Foundation ranks Virginia at #19 in business tax burden ahead of Missouri, Michigan, and Minnesota. Virginia is also ahead of most Southern states except for Florida, Texas, Tennessee, and Alabama. See the entire report here: Business Tax Burden Report (pdf)

The state may screw HR when it comes to landing high-tech businesses and get transportation funds, but its not going to kill off Ford because it would be screwing itself as well.

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The report's calculations did not take into account the possibility that another employer might take over the plant, which would soften the job losses and the expected decline in gross regional product, Whaley said.
I'm telling you that this is the avenue that Norfolk and the state should be focusing on. Stop begging Ford to delay or reverse their decision and focus on a replacement.
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Slow down rus, you're sounding a lot like our media outlets. Let's just wait and see what the city and state can pull off before we get too doom-n-gloom over this. They have some time so let's give it to them, it's only been a week.

What can the city and state pull off. None of the closures have been overturned? The plant is closing. I understand what you are saying but we have to look at the reality of this issue. What will be done at that location after the plant closes and what happens if Ford sits on it for years?

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The reality is that we have only just begun. I have no doubt that Ford is leaving, and the sooner the city and state come to that same conclusion then we can move forward. My hope is that Ford hits the city and state with a flat out "CLOSED, THAT'S OUR FINAL ANSWER" very soon. That will let them know real quick that they are barking up the wrong tree. It also gives us some time to get Ford the "F-out" and try our hardest to get a replacement automaker in there. If not an automaker then something of greater or equal value. The state better open up it's wallet to lure something BIG here because this is not just a Norfolk/HR issue.

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