Ford plans more layoffs

Carmaker to slash 4,000 jobs in 2006, 2,750 cut this year

November 19, 2005|By KNIGHT RIDDER/TRIBUNE

DETROIT -- Ford Motor Co. will cut about 10 percent, or 4,000, of its white-collar jobs in North America next year, mostly through layoffs, as part of a sweeping cost-cutting plan to be unveiled in January, the company told workers via e-mail yesterday.

The cutbacks are the latest blow to Michigan's suffering economy and deal another setback to an auto industry reeling from the October bankruptcy filing of Delphi Corp., the state's fourth-largest company, and huge losses at General Motors Corp.

The Ford job cuts - which will include salaried and contract employees, and workers hired from employment firms - are the latest effort by Ford to head off the kind of financial crisis that has battered General Motors. They are in addition to a plan to cut 2,750 white-collar jobs this year in North America.

Detroit's three automakers have trimmed about 100,000 hourly and salaried positions in the United States since 2000. DaimlerChrysler AG's Chrysler Group shed 6,000 hourly and salaried jobs last year and has cut 40,000 positions since 2000, including a big round of layoffs in 2001.

General Motors has cut its white-collar work force in North America about 6 percent annually in recent years through attrition.

Ford salaried workers will have to wait through the holidays to find out whether they have jobs next year.

The job-reduction plan is the first significant cost-cutting move by Ford since Mark Fields became executive vice president in charge of operations in the Americas in September.

"The reality is that the best of the competition is more competitive than we are on quality and costs, more efficient than us in their operations, and they're achieving market-share growth and sizable profitability all at the same time," Fields said in the e-mail. "We must do the same."

Ford Chief Executive Officer William Clay Ford Jr. said last month, when the automaker posted a large third-quarter loss in North America, that the company would announce a plan in January to close several plants as part of a cost-cutting plan. The North American division lost $2.1 billion in the first nine months of the year.

In addition to the layoffs, jobs will be cut through attrition and the elimination of some open positions, said Ford spokesman Oscar Suris. Ford will begin notifying white-collar employees about the layoffs early next year and expects to complete them by the end of March, he said.

Ford resorted to layoffs last summer, departing from its past practice of offering buyout packages to encourage workers to retire early.

That move so infuriated the work force that William Ford sent a memo to employees in August explaining why it was needed.

"It's a new, rapidly evolving, brutally competitive global marketplace," he said. "Because of that, our workforce reductions aren't the traditional layoffs of the past. We're not downsizing temporarily with the hope that things will get better."

In the new round of job cuts, Ford will offer some workers severance packages based on number of years served, Suris said.

Chief Financial Officer Don R. Leclair said last month that Ford had earmarked $700 million for job buyouts and job-reduction programs this year.

Despite Ford's losses in North America, the company is profitable, earning $1.9 billion through September, down from $3.4 billion a year earlier.

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