U.S.A.:Ford job cuts grow to 8,200, more Euro cuts...
Automaker trims 3,000 more jobs in Europe as it struggles to turn profit slide around
By Mike Hudson / The Detroit News
DEARBORN -- Ford Motor Co. announced today that it is cutting 3,000 jobs at its plant in Genk, Belgium, adding to 5,200 job cuts in the United States and Europe the automaker has already disclosed in the last week.
The company will idle 3,000 workers in Genk, as it cancels plans to build the Focus model there and reduces Mondeo production to two shifts from three. Ford employs 8,300 people at Genk.
Ford had a second-quarter loss of $525 million in Europe as it lost market share to Toyota Motor Corp. and PSA Peugeot Citroen. In the first eight months, Ford's Western Europe sales fell almost twice as much as the market as a whole.
"We are incurring significant losses at Ford of Europe which aren't sustainable," Lewis Booth, president and chief operating officer of Ford Europe, said at a news conference in Brussels. "We need to reduce our cost structure faster than we anticipated."
News of the cost-cutting actions came a day after the United Auto Workers union ratified a national labor contract with Ford that allows the company to close two U.S. assembly plants and three smaller parts factories.
The contract also gives Ford -- along with General Motors Corp. and DaimlerChrysler AG's Chrysler Group -- more flexibility to reduce its hourly work force.
The combined actions signal that Ford, which has 350,000 employees worldwide, is cutting even deeper than it forecast in January 2002 when the automaker outlined a major restructuring after losing $6.4 billion in 2001 and 2002.
Ford and its crosstown rivals are clearly taking advantage of the tough economy and the gains by foreign automakers in the United States to push through plant closures and other cost-cutting actions that would meet stiff opposition in better times.
On Tuesday, Ford executives notified employees of a series of cutbacks needed to achieve the automaker's goal of cutting white-collar personnel costs by 10 percent worldwide before the end of the year. Ford said it will cut 1,700 contract employees in North America who work at Ford but are employed by outside agencies, and lay off 50 U.S. salaried workers. Ford also said it will not fill 1,300 open jobs in North America.
"Our efforts will ultimately protect thousands upon thousands of jobs and strengthen Ford Motor Company's future," Jim Padilla, Ford's executive vice president in charge of North American operations, said Tuesday in an e-mail to employees. "These decisions have been borne out of our need to respond to an increasingly competitive automotive industry."
The 3,000 new jobs cuts in Europe come in addition to 1,700 layoffs at the automaker's German operation that were disclosed Monday. Another 500 job cuts at Ford's business unit in England were made public last week.
Ford said it planned investment at Genk in 2001 when the total Western European car market was 17.8 million vehicles. This year it expects sales of 16.7 million units. Booth said he does not expect the market to recover next year.
Ford builds 1,650 Mondeos and 480 Transits each day, according to Ford Belgium's Web site. Job cuts and severance packages would have to be negotiated with Ford's Belgian unions.
While terms of the Ford-UAW contract have been ratified, talks will continue for up to 90 days between the UAW and Visteon, Ford's largest parts supplier and former subsidiary, as the union and the companies hammer out the specifics of a two-tiered wage system for new Visteon hires.
The timing of Ford's moves affecting salaried workers bookended the labor talks. In July, Ford outlined its plan to cut white-collar personnel costs by 10 percent on the same day company executives shook hands with UAW officials to begin contract negotiations. Tuesday's announcement of salaried job cuts came the same day union workers ratified the new agreement.
The ratification at Ford came a week after workers at Chrysler ratified a deal, leaving GM workers as the only Big Three work force yet to sign off on a contract.
The Ford pact follows the economic terms set in the UAW's contract with Chrysler, giving hourly workers a $3,000 signing bonus, a performance bonus in the second year, a 2 percent raise in the third year and a 3 percent raise in the fourth year. The agreement largely protects top-shelf health benefits for union members.
It also provides pension and health benefits for 77,000 retirees and 24,000 surviving spouses at both Ford and Visteon.
The agreement allows Ford to close factories in Edison, N.J., and Lorain, Ohio, the company's first assembly-plant closures in 19 years. Three smaller parts plants also will be divested.
Analysts are uncertain if the new contract and the personnel cost reduction plan can help Ford successfully overcome steep losses in U.S. market share, which have led to an over-capacity crisis for the company.
"While it's laudable that the UAW and Ford came to an agreement very soon after the contract, there may be more changes needed to the capacity situation going forward," said Michael Robinet, an auto analyst with CSM Worldwide in Northville. "The market will be very competitive in the future."
Under the two-tier wage agreement, expected to be determined within the 90-day extension outlined in a side letter agreement to the contract, current workers would continue to be paid on the current pay scale while new employees would be paid a gradually increasing percentage of the scale.
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.....