Ford Employees Bracing for Big Job Cuts
Associated Press | January 23, 2006
By DEE-ANN DURBIN
Ford Motor Co. employees are bracing for thousands of jobs cuts in North America as the company embarks on a new restructuring plan.
Ford was set to announce details of the plan Monday morning in Dearborn, Mich., home of the 103-year-old automaker's headquarters.
Ford has refused to release details of the plan, dubbed the "Way Forward," which is expected to include plant closings, product changes and cuts to Ford's salaried ranks. Ford has approximately 87,000 hourly workers and 35,000 salaried workers in North America.
The No. 2 U.S. automaker has been hurt by falling sales of its profitable sport utility vehicles, growing health care and materials costs and labor contracts that have limited its ability to close plants and cut jobs. The United Auto Workers union will have to agree to some of the changes Ford wants to make.
"We don't like to see any jobs go away," UAW President Ron Gettelfinger said last week. "We're always in hope that down the road we'll be able to reverse some of those decisions."
Ford reported Monday before the restructuring announcement that it earned $124 million in the fourth quarter, up 19 percent from the previous year thanks to the sale of its Hertz Corp. rental division and improved profits for its luxury brands. Its profit for the year fell 42 percent to $2 billion.
Its North American automotive operations lost $143 million in the October-December period, an improvement from a loss of $470 million the same period a year ago. It cited cost reductions and favorable vehicle pricing, offset by losses at Visteon auto parts facilities now controlled by Ford. Its North American operations reported a loss of $1.6 billion for all of 2005.
Ford also has seen its U.S. market share slide as a result of increasing competition from foreign rivals. The company suffered its tenth straight year of market share losses in the United States in and for the first time in 19 years, Ford lost its crown as America's best-selling brand to General Motors Corp.'s Chevrolet. Ford sold around 2.9 million vehicles for a market share of 17.4 percent in down from 18.3 percent the year before and 24 percent in 1990.
The restructuring is Ford's second in four years. Under the first plan, Ford closed five plants and cut 35,000 jobs, but its North American operations failed to turn around.
Ford used just 79 percent of its North American plant capacity in down from 86 percent in 2004, according to preliminary numbers released last week by Harbour Consulting Inc., a firm that measures plant productivity. By contrast, rival Toyota Motor Corp. was operating at full capacity.
States have been scrambling to offer tax credits and other incentives to keep Ford from closing their facilities ever since the automaker said last fall that it was developing a restructuring plan.
Earlier this month, Missouri Gov. Matt Blunt and other state officials flew to Ford's headquarters for a one-hour meeting with Ford executives. Michigan Gov. Jennifer Granholm outlined a package of incentives to Ford last week but said she wasn't given any assurance that Michigan plants would be spared.
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