Canada:Ford poised to follow with cuts
Ford poised to follow with cuts
By SHAWN MCCARTHY
Toronto Globe and Mail
New York — Ford Motor Co. executive Mark Fields is no doubt watching closely as his rivals at General Motors Corp. attempt to sell a restructuring plan that would close 12 plants and eliminate 30,000 jobs.
Mr. Fields, who was appointed president of Ford's Americas unit in September, is scheduled next month to submit to the board of directors his own plan to overhaul the money-losing company's production in the hemisphere.
Analysts expect the Ford plan will be nearly as painful as the one GM announced yesterday and possibly more difficult to accomplish.
At the same time, North America's second-largest car maker is negotiating with its United Auto Workers union to slash post-retirement health benefits by as much as $1-billion a year (U.S.).
As with GM, Ford will be counting on the agreement of its unions to eliminate jobs and cut retiree benefits, and will be looking to bolster investor confidence to support its sagging share price and improve its junk-status credit rating. Ford has relied heavily on trucks and SUVs to maintain its sales in North America. But like GM, it has seen its margins squeezed by intense competition caused by overcapacity in the North American market, and by a sharp decline in the sale of larger vehicles because of soaring gasoline prices.
The company lost $284-million (U.S.) in the third quarter, while its North American vehicle operation has lost $1.4-billion so far this year.
On Friday, Ford announced it would eliminate 4,000 salaried jobs or 10 per cent of its white-collar work force in North America. Ford chairman and chief executive officer Bill Ford plans to unveil the broader restructuring plan by late January, and has warned it will include plant closings and the loss of thousands of jobs.
Analysts at the independent Center for Automotive Research in Ann Arbor, Mich., expect Mr. Fields to recommend the elimination of 20,000 jobs and at least five major assembly plants, although they believe Canada will be largely spared.
The five are in St. Louis; Atlanta; Wixam, Mich.; St. Paul, Minn.; and Cuautitlan, Mexico.
Steven Szakaly, an economist with the automotive research group, said Ford faces a tremendous challenge in reducing its work force because its employees tend to be younger than those at GM, and therefore would be less likely to accept a buyout.
“I think Ford is in a much worse case right now than GM is,” Mr. Szakaly said.
He said Mr. Fields' most urgent task is to rebalance Ford's product mix to include a profitable line of passenger cars. Currently, Ford's relies on trucks and SUVs for 70 per cent of its sales in North America, far higher than its rivals.
Other analysts believe Canada is unlikely to be spared in the coming round of cutbacks at Ford.
The company closed its Ontario Truck Plant in Oakville, Ont., last year. But $200-million (Canadian) in financial assistance from Ontario and the federal government are helping pay for a $1-billion redevelopment of the site to prepare it for flexible manufacturing, which will allow Ford to adjust more quickly to shifts in the market.
The Canadian Auto Workers union managed to prevent the potential closing of a Ford assembly plant in St. Thomas, Ont., and an engine plant in Windsor, Ont., during the recent contract talks.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....