Adam Berry / Bloomberg News
Visitors check out a Ford iosis on Wednesday at the Frankfurt auto show. Executives are looking for more cuts after racking up a new round of financial losses across North America.
Frankfurt Auto Show
Ford could shut more plants
Restructuring could raise number of factory closures; Padilla says he'll do 'whatever it takes.'
By Christine Tierney / The Detroit News
FRANKFURT, Germany -- Ford Motor Co. may shutter more factories as part of a restructuring plan now on the drafting board, Ford President James Padilla said.
"We're committed to do whatever it takes," Padilla said at a news briefing at the Frankfurt auto show. "We will align our capacity with demand and see how that falls."
Last month, Ford CEO Bill Ford Jr. said the automaker would announce a restructuring plan, its second in four years, before winter.
The automaker is still in the process of closing plants announced in the last turnaround plan, but executives are looking for more cuts after a racking up a new round of financial losses across North America. Ford lost nearly $1 billion in North America during the second quarter. Padilla blamed market share losses, in part, and higher commodity prices.
"Ford is in a tough spot, between General Motors Corp.'s price-cutting and the Japanese OEMs' (automakers') growth," Merrill Lynch auto analyst John Casesa said in a research note issued Wednesday after Ford announced it had concluded an agreement to sell its Hertz rental car business. The deal is valued at $15 billion, which includes debt and $5.6 billion for the equity in Hertz.
"While we haven't specifically earmarked what we'll do with that cash, we have indicated it will go to financing the auto business," Padilla said. He added that the company had $22 billion in gross cash "and this will add to our war chest."
This week, Ford also struck a deal with the Canadian Auto Workers union to close a casting plant in Windsor, eliminating 1,100 jobs. It is reducing its salaried ranks in North America by 2,750 positions. The cuts include white-collar layoffs for the first time in about 30 years.
Last week, Ford appointed Mark Fields, head of the automaker's Premier Automotive Group, to run the struggling North American operations.
At the same news briefing, Fields said Ford's Jaguar premium brand was showing "sequential improvement" but he declined to say when the carmaker was expected to stop losing money.
"I'm not going to put a date on when Jaguar will return to profitability," Fields said. Jaguar executives had previously predicted they would break even by 2007 after cumulative losses that have run into the billions.
"The Jaguar situation doesn't lend itself to a quick fix," Fields said. But, he added, "the urgency is there. The company's not in a mood to accept any brands that'll underperform over a long period of time."
Fields, who previously ran Ford's Mazda Motor Corp. affiliate, declined to discuss his new responsibilities, which he takes up Oct. 1. "The approach I've taken in Europe is a realistic approach."