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By TOM KRISHER, AP
DETROIT (Sept. 15) - Ford Motor Co. is cutting more than 10,000 additional salaried jobs, offering buyouts to all of its 75,000 U.S. hourly workers and shutting down two more plants in a plan to end financial losses and remake itself into a smaller, more competitive car company.
The company said in a news release Friday that it would shutter a stamping plant in Maumee, Ohio, in 2008 and an engine plant in Essex, Ontario, in 2007. That is in addition to previous plans for 14 plant closures.
In addition, an assembly plant in Norfolk, Va., will close in 2007, a year earlier than previously announced and will see a shift reduction in January. Also, an assembly plant in St. Paul, Minn., which is scheduled to close in 2008, will have a shift reduction in 2007.
Ford said it would complete its cuts of about 30,000 hourly jobs by the end of the 2008, four years ahead of its previous target. Ford also said it already had cut 4,000 salaried positions in the first quarter of this year.
The new cuts would reduce Ford's total North American work force by 29 percent, from the current level of about 130,000 to about 92,000 by the end of 2008.
By 2008, North American factory capacity will be reduced by 26 percent compared to 2005 levels, Ford said in the release, which was to be followed at 9 a.m. by a teleconference with top executives.
The company said the plan would cut about $5 billion in operating costs, mainly by offering early retirement and buyout packages to all hourly workers and to white-collar employees. Ford plans to expand buyout and early retirement offers to the company's U.S. hourly work force of more than 75,000 as part of the plan.
Todd Wiech, a 46-year-old Ford worker in St. Paul, said he's wrestling with his options, which include the buyout, going back to school or trying to transfer to the Dearborn, Mich., truck plant, where Ford plans to add a third shift to make F-150s.
He said it wouldn't be easy to walk away from 18 years with the company.
"Myself - people that were hired in 1988 - it hits us pretty hard because we've got a lot of time invested with Ford and we're getting a little older to go out looking," said Wiech, whose daughter will graduate from high school in two years.
Ford also plans to suspend the quarterly dividend on its common and Class B stock in the fourth quarter of this year. It said it expects to achieve full-year profitability in its North American automotive operations no earlier than 2009. The company had previously pledged to make money in North America in 2008.
Ford lost $1.4 billion during the first half of this year and is under pressure from Wall Street to make further cuts and roll out new cars and trucks more quickly.
In July, the company pledged to accelerate its "Way Forward" restructuring plan, which when introduced in January called for the up to 30,000 job cuts as well as closing 14 facilities by 2012. The new cuts bring the total number of plant closures to 16.
"These actions have painful consequences for communities and many of our loyal employees," Executive Chairman Bill Ford said in the restructuring release. "But rapid shifts in consumer demand that affect our product mix and continued high prices for commodities mean we must continue working quickly and decisively to fix our business."
The company indicated that it is ready to accept a smaller slice of the market, focusing on profitable sales instead of sheer volume. It said that, with investments in new products and quality improvements, it expects market share of about 14 to 15 percent going forward.
This year, the company is forecasting Ford, Lincoln and Mercury market share in the low-16 percent range. The country's second-largest automaker has seen its market share decline steadily in recent years from about 26 percent in the early 1990s.
"Turnarounds of this magnitude succeed when capacity and costs are aligned with a realistic expectation of demand," Chief Executive Alan Mulally said in a statement. Mulally, who was named to the post last week, led a turnaround at the commercial jetmaking division of Boeing Co.
The company also said it would roll out new or significantly upgraded cars and trucks in 70 percent of its Ford, Lincoln and Mercury brands, expanding in growing areas such as car-based crossovers. At the same time, Ford said it will try to maintain its lead in the truck segment by introducing a new F-150 that will go on sale in 2008.
Ford has acknowledged a need for drastic changes in its product lineup. Like other U.S. automakers, its bottom line is heavily dependent on high-margin trucks and large SUVs, but recently consumer preferences have shifted toward more fuel-efficient vehicles. Ford says the speed of that shift caught it by surprise.
Ford's method of slashing its work force is similar to cuts made earlier this year by rival General Motors Corp. At GM, 34,410 hourly workers have accepted buyouts or early retirement offers this year. Figures on white-collar cuts were not available.
Ford shares fell 51 cents, or 5.6 percent to $8.58 in premarket trading on Friday. Its shares have traded in a 52-week range of $6.06 to $10.09.
Associated Press Writers Sarah Karush in Detroit and Martiga Lohn in St. Paul, Minn., contributed to this report.
DETROIT (Sept. 15) - Ford Motor Co. is cutting more than 10,000 additional salaried jobs, offering buyouts to all of its 75,000 U.S. hourly workers and shutting down two more plants in a plan to end financial losses and remake itself into a smaller, more competitive car company.
The company said in a news release Friday that it would shutter a stamping plant in Maumee, Ohio, in 2008 and an engine plant in Essex, Ontario, in 2007. That is in addition to previous plans for 14 plant closures.
In addition, an assembly plant in Norfolk, Va., will close in 2007, a year earlier than previously announced and will see a shift reduction in January. Also, an assembly plant in St. Paul, Minn., which is scheduled to close in 2008, will have a shift reduction in 2007.
Ford said it would complete its cuts of about 30,000 hourly jobs by the end of the 2008, four years ahead of its previous target. Ford also said it already had cut 4,000 salaried positions in the first quarter of this year.
The new cuts would reduce Ford's total North American work force by 29 percent, from the current level of about 130,000 to about 92,000 by the end of 2008.
By 2008, North American factory capacity will be reduced by 26 percent compared to 2005 levels, Ford said in the release, which was to be followed at 9 a.m. by a teleconference with top executives.
The company said the plan would cut about $5 billion in operating costs, mainly by offering early retirement and buyout packages to all hourly workers and to white-collar employees. Ford plans to expand buyout and early retirement offers to the company's U.S. hourly work force of more than 75,000 as part of the plan.
Todd Wiech, a 46-year-old Ford worker in St. Paul, said he's wrestling with his options, which include the buyout, going back to school or trying to transfer to the Dearborn, Mich., truck plant, where Ford plans to add a third shift to make F-150s.
He said it wouldn't be easy to walk away from 18 years with the company.
"Myself - people that were hired in 1988 - it hits us pretty hard because we've got a lot of time invested with Ford and we're getting a little older to go out looking," said Wiech, whose daughter will graduate from high school in two years.
Ford also plans to suspend the quarterly dividend on its common and Class B stock in the fourth quarter of this year. It said it expects to achieve full-year profitability in its North American automotive operations no earlier than 2009. The company had previously pledged to make money in North America in 2008.
Ford lost $1.4 billion during the first half of this year and is under pressure from Wall Street to make further cuts and roll out new cars and trucks more quickly.
In July, the company pledged to accelerate its "Way Forward" restructuring plan, which when introduced in January called for the up to 30,000 job cuts as well as closing 14 facilities by 2012. The new cuts bring the total number of plant closures to 16.
"These actions have painful consequences for communities and many of our loyal employees," Executive Chairman Bill Ford said in the restructuring release. "But rapid shifts in consumer demand that affect our product mix and continued high prices for commodities mean we must continue working quickly and decisively to fix our business."
The company indicated that it is ready to accept a smaller slice of the market, focusing on profitable sales instead of sheer volume. It said that, with investments in new products and quality improvements, it expects market share of about 14 to 15 percent going forward.
This year, the company is forecasting Ford, Lincoln and Mercury market share in the low-16 percent range. The country's second-largest automaker has seen its market share decline steadily in recent years from about 26 percent in the early 1990s.
"Turnarounds of this magnitude succeed when capacity and costs are aligned with a realistic expectation of demand," Chief Executive Alan Mulally said in a statement. Mulally, who was named to the post last week, led a turnaround at the commercial jetmaking division of Boeing Co.
The company also said it would roll out new or significantly upgraded cars and trucks in 70 percent of its Ford, Lincoln and Mercury brands, expanding in growing areas such as car-based crossovers. At the same time, Ford said it will try to maintain its lead in the truck segment by introducing a new F-150 that will go on sale in 2008.
Ford has acknowledged a need for drastic changes in its product lineup. Like other U.S. automakers, its bottom line is heavily dependent on high-margin trucks and large SUVs, but recently consumer preferences have shifted toward more fuel-efficient vehicles. Ford says the speed of that shift caught it by surprise.
Ford's method of slashing its work force is similar to cuts made earlier this year by rival General Motors Corp. At GM, 34,410 hourly workers have accepted buyouts or early retirement offers this year. Figures on white-collar cuts were not available.
Ford shares fell 51 cents, or 5.6 percent to $8.58 in premarket trading on Friday. Its shares have traded in a 52-week range of $6.06 to $10.09.
Associated Press Writers Sarah Karush in Detroit and Martiga Lohn in St. Paul, Minn., contributed to this report.