Print

Email story

Comment

Email editor

Up to 30,000 jobs may be cut at Ford

A report says the No. 2 U.S. automaker will make far deeper cuts than announced last month.

By wire services
Published December 8, 2005

In a sign of more urgent cost-cutting ahead, Ford Motor Co. plans to eliminate 25,000 to 30,000 hourly jobs in North America within five years and close at least 10 plants, according to a report Wednesday in the Detroit News citing unnamed sources.

The newspaper report suggests Ford's cuts will go far deeper than forecasts last week of five Ford plant closings and some 7,000 job cuts, and now closely match those announced last month by Detroit rival General Motors.

Ford, the No. 2 U.S. automaker, will also announce the departure of up to seven top executives in coming weeks, the newspaper said, citing people familiar with the plan.

Ford has said it would announce a comprehensive restructuring plan in January that aims to restore North American operations to profitability.

Ford declined comment Wednesday on the specifics of the newspaper report. The company acknowledged its board of directors met and will do so again today to consider a restructuring plan likely to include major job cuts and plant closings. Ford is expected to reveal details of that plan Jan. 23.

Ford's stock rose modestly Wednesday, closing up about 1 percent at $8.20 a share.

As part of a turnaround plan dubbed the "Way Forward," Ford in November said it planned to eliminate 4,000 salaried jobs, or 10 percent of its North American white-collar work force. That same month, larger competitor GM announced plans to slash 30,000 manufacturing jobs and close a dozen North American plants. Both automakers are struggling against high costs and increased Japanese competition.

Ford chairman and chief executive Bill Ford Jr. has said the plan would include "significant plant closings" but has declined to elaborate. The extent of the restructuring has been the subject of widespread speculation.

Ford had 122,877 North American employees at the end of last year.

Like GM, Ford has seen its margins squeezed by soaring health-care and raw material costs, and a decline in U.S. market share. So far this year, Ford's North American unit has lost more than $1.4-billion before taxes. Ford's U.S. sales have fallen for all but two of the last 18 months, and company sales fell 18 percent in November.

As reported by the Detroit News, Bill Ford launched a cost-cutting plan after he became CEO four years ago that called for 20,000 job cuts in North America, several plant closures, the elimination of vehicles like the Mercury Cougar. He also set a goal then to earn $7-billion in annual pretax profit by the middle of this decade. Ford has since abandoned that goal.

Analysts expect Ford to earn closer to $2.5-billion this year after taxes, but it is struggling with drooping sales and deep losses in North America.

The newspaper said those Ford assembly plants most vulnerable to closing include its factories in St. Paul, Minn., which produces the Ford Ranger pickup, and St. Louis, Mo., whose prospects have been hurt by a dramatic decline in demand for Ford's once best-selling Ford Explorer SUV. Both Ford's underused plant in Wixom, Mich., and its Atlanta assembly facility also remain targets of speculation.

Automotive industry analysts say some Ford Motor Co. plants are at more risk of closure than others for a number of reasons, including the products they make, their age, the level of flexibility they have to make different products and their proximity to suppliers. Here are some plants that three industry analysts say are most at risk.

ATLANTA ASSEMBLY (GA.)

Opened in 1947; employs 2,028; makes Ford Taurus

CUATITLAN ASSEMBLY (MEXICO)

Opened in 1970; employs 900; makes Ford F-series trucks for Mexican market

MICHIGAN TRUCK (WAYNE, MICH.)

Opened in 1957; employs 3,113; makes Ford Expedition, Lincoln Navigator

OAKVILLE ASSEMBLY (ONTARIO)

Opened in 1953; employs 3,557; makes Ford Freestar, Mercury Monterrey

ST. LOUIS ASSEMBLY (MO.)

Opened in 1948; employs 1,445; makes Ford Explorer, Mercury Mountaineer

ST. THOMAS (ONTARIO)

Opened in 1967; employs 2,578; makes Ford Crown Victoria

TWIN CITIES ASSEMBLY (MINN.)

Opened in 1925; employs 1,965; makes Ford Ranger

WIXOM ASSEMBLY (MICH.)

Opened in 1957; employs 1,567; makes Lincoln Town Car, Lincoln LS, Ford GT

Sources: Ford Motor Co.; Global Insight Inc.; IRN Inc.; Conway, MacKenzie & Dunleavy.

[Last modified December 8, 2005, 00:51:07]