Ford set to close plants, cut jobs in revamp
Automaker is mum, but a major announcement is expected Monday
Updated: 8:45 a.m. ET Jan. 23, 2006
DETROIT - Ford Motor Co. employees from Canada to Mexico were bracing for the possibility of thousands of job cuts as the No. 2 U.S. automaker seeks to reverse its North American operations’ billion-dollar losses by closing some plants.
Ford was set Monday morning to announce details on its long-term restructuring plan, dubbed the “Way Forward,” in Dearborn, home of the 103-year-old automaker’s headquarters.
Ford has refused to release details of the plan, 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 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 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 2005, and for the first time in 19 years, Ford lost its crown as America’s best-selling brand to General Motors Corp.’s Chevrolet.
At the top of the list for closure, experts believe, is the St. Louis plant in Missouri, which makes the struggling Ford Explorer and the Mercury Mountaineer. Explorer sales were down 30 percent in the first 11 months of this year despite an extensive redesign.
Also high on the list are the Atlanta plant and the Twin Cities plant in St. Paul, Minn. Atlanta makes the Ford Taurus sedan, which is scheduled to be phased out next year, while the Twin Cities makes the slow-selling Ford Ranger pickup.
A plant in Cuatitlan, Mexico, which makes F-series trucks for the Mexican market, also is at risk, analysts said. Other plants threatened are in Wixom, Mich., and St. Thomas, Ontario.
Ford sold around 2.9 million vehicles for a market share of 17.4 percent in 2005, 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 2005, 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.
GM recently announced plans to cut 30,000 hourly jobs and close 12 facilities by 2008 in an effort to restore profitability. GM reported that its sales fell 4 percent in 2005.
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.
Will the last person leaving Michigan please shut the lights off.
Toyota and Nissan are expanding.
US automakers are shrinking.
US Auto Makers continue down the same managment path they have been on for the last 50 years. Unbelieveable.
Hey! US Auto Makers - climb out of the pot of warm water NOW. Climb out now!
Heard about this early this morning. We are sitting on pins and needles waiting for the closure list as it could affect us directly. The list from the experts has us in the clear, hoepfully they are right.
Can't compete with the labour the jap automakers can use. North Americans like weekends off, like evenings off, and won't put in ovetime unless it is paid (in Japan it is expected at many major companies to put in unpaid overtime for the companies' benefit) Nevermind those communist unions fucking over North America, artifially raising wages which raise prices....
Its no where near as much the management as the America Haters and their foreign superiority delusions.
I hope all the fuckers who bought that trash from the foreign companies are happy.