Ford seeking more cost cuts as turnaround effort continues
By MARY CONNELLY
Ford Motor Co. CFO Allan Gilmour will complete a departmental review of the company's global operations by Labor Day, which will trigger more cost cutting. But the company will not announce sweeping cuts like those decreed in January, said Ford spokesman David Reuter.
Gilmour, hand-picked by Chairman Bill Ford to rejoin the company in May, mandated the worldwide review at the end of June. He found that the company was six months behind on its plan to reduce material costs by $3 billion - or $700 per vehicle - by mid-decade.
"The company is in a bind," Saul Rubin, stock analyst with UBS Warburg, said in a written report last week. "Ford is now being run by managers that are realistic, pragmatic, straight-talking and willing to prepare for the worst. There's a will. But where's the way? Ford will struggle to make progress."
Ford posted a modest profit in the second quarter but signaled that red ink would return in the third quarter. Despite more than six months of turnaround efforts, the stock opened Friday, Aug. 9 at $11.98 per share, only 46 cents above its 52-week low.
Any salaried job cuts are likely to result from the elimination or scaling back of an operation, not from an across-the-board reduction, Reuter said. Ford eliminated 5,000 salaried jobs in North America in the first six months of the year.
Details of the global review are scant. But Gilmour has signaled he seeks:
Further savings in manufacturing and product development.
More asset sales, including any Ford-owned land.
Employee benefits that are "efficient."
Fewer vehicle prototypes, more reliance on computer modeling
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.....