Ford likely to step up restructuring

Plans include early retirement, buyouts and speeding up plant closings

September 12, 2006|By Rick Popely and Jim Mateja | Rick Popely and Jim Mateja,Chicago Tribune

Ford Motor Co. appears ready to shift its restructuring plan into a higher gear this week, offering early retirement and buyouts to white-collar workers and speeding up plant closings.

With Ford's board scheduled to meet tomorrow and Thursday in Dearborn, Mich., salaried employees were bracing for a new round of staff cuts that could be announced as early as Friday.

This week's board meetings will be the first for Alan R. Mulally, lured from Chicago-based Boeing Co. last week to take the No. 2 spot at struggling Ford under Chairman William Clay Ford Jr., great-grandson of the company's founder.

Mulally steps in as chief executive and president just as Ford contemplates massive changes in the face of a $1.4 billion first-half loss and a 10 percent decline in U.S. sales.

One possibility is that Ford will offer buyouts or early retirement to all union workers, copying a move from General Motors Corp.

"Mulally was brought in to show there is a high sense of urgency at Ford and that it has to move more quickly than it has," said David Cole, chairman of the Center for Automotive Research. "It wouldn't surprise me if they speed up their buyout program and offer a blanket buyout like GM did."

Cole had dinner with Mark Fields, president of Ford of the Americas and head of the Way Forward restructuring program, the evening Mulally was named CEO. Cole's take was that Mulally has endorsed the accelerated plan to be presented to Ford's board.

"Mulally told Mark that he shouldn't delay the acceleration of Way Forward until he [Mulally] got his feet wet," Cole said.

Cole also said Fields believes Ford has the cooperation of the United Auto Workers to close plants and cut jobs more quickly than planned. Ford announced in January that it would shutter 14 North American plants and eliminate 30,000 union jobs by 2012, but Wall Street analysts have criticized that as too slow. According to Bloomberg News, the plant closings and job cuts will be completed by 2008.

"Clearly, Ford needs a tighter timeline," said Joe Phillippi, principal of Auto Trends consulting firm.

UAW leaders from Ford locals are scheduled to meet in the Detroit area this week. UAW officials could not be reached Monday.

Ford started the year with 82,000 UAW workers, and 6,500 had accepted buyout packages by Sept. 1 at plants scheduled to close.

Other reports had Ford offering early retirement and buyouts to white-collar workers beyond the 4,000 jobs eliminated this year. Ford has 35,000 to 40,000 U.S. salaried workers.

White-collar cuts will likely spread to Ford's European brands. Volvo employees heard Monday that the Sweden-based brand will eliminate 950 salaried employees globally but were not told details.

All along, Ford has said it would turn Way Forward up a notch by the end this month. "We aren't going to announce when we plan to share more details on Way Forward and whether it includes more buyouts, because that is speculation," Ford spokesman Oscar Suris said Monday.

Ford also wouldn't comment on a Detroit News report that Anne Stevens, 57, chief operating officer for its North American operations and an executive vice president, may leave to take the reins become chairman and chief executive of Carpenter Technology Corp. The company makes alloy and engineered products used in autos and planes among other things.

The departure of Stevens, the highest-ranking woman in the industry, would be in keeping with her desire to be CEO of an industrial company. Mulally's arrival diminished her chance at Ford.

"We have nothing to offer on that," Suris reiterated. "We don't comment on speculation."

Rick Popely and Jim Mateja write for the Chicago Tribune.

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