Ford may cut 30,000 jobs

Restructuring plan to be laid out today would shut 10 plants

December 07, 2005|By THE DETROIT NEWS

DEARBORN, Mich. -- Ford Motor Co. executives were set to present a restructuring plan to the company's board of directors today that calls for closing at least 10 assembly and component plants and eliminating 25,000 to 30,000 blue-collar jobs in North America within five years, according to people familiar with it.

The cuts would be deeper than many expected, signaling the urgency of Chairman and CEO William Clay Ford Jr.'s push to restore the automaker's ailing North American operations.

Bill Ford has promised that the impending cuts, expected to be announced Jan. 23, will affect all levels of the company. The automaker will announce the departure of as many as seven top executives by Jan. 23, according to those familiar with the plan. The broad outlines of Ford's plan - dubbed the "way forward" - were approved by directors during an off-site meeting in October with top executives in South Carolina.

In meetings today and tomorrow, Mark Fields, Ford's new president of the Americas division, will walk board members through the fine points, including budget projections for 2006 and 2007, capital expenditure requests and other details. He also will present his blueprint for revitalizing the Ford, Mercury and Lincoln brands, which includes a new strategy to attract young buyers for the Blue Oval brand.

The plan, which will guide the company through 2011, calls for 25,000 to 30,000 blue-collar jobs to be eliminated in North America.

Ford had 87,000 UAW-represented workers in North America at the end of 2004, and has about 11,600 union workers in Canada.

"That scale of action by Ford would be perceived as a very aggressive right-sizing move and would go a long way toward Ford getting its cost structure back in line with its much-diminished market share," said Glenn Reynolds, an analyst with Credit Sights Inc., a New York-based research firm.

Ford Motor would not comment. "Our work continues," said spokesman Oscar Suris. "These plans will be final when they're ready to be shared publicly."

The plan appears to be more far-reaching than the one Bill Ford launched after he became chief executive four years ago. That plan called for 20,000 job cuts in North America, several plant closures and the elimination of unprofitable models.

At the time, Bill Ford set the goal of making $7 billion in pre-tax profit by the middle of the decade. He has since abandoned that goal.

The company is likely to make about $2.5 billion this year after taxes, but has struggled with falling sales and deep losses in North America.

The carmaker is eager to demonstrate that cuts to its hourly work force are being matched by similar cuts to its white-collar work force and executive staff. It has announced plans to cut about 4,000 salaried workers in the first quarter of 2006 in addition to 2,750 workers this year.

Over the past year, Ford's pre-tax profits in North America have fallen from almost $1.8 billion in the first nine months of 2004 to a loss of nearly $2.2 billion for the corresponding period in 2005. The Ford, Lincoln and Mercury share of the domestic market has dropped to 17.4 percent from 25.6 percent in 1995.

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