Ford to close 7 assembly plants, cut up to 30,000 jobs
Dale Jewett and Amy Wilson
Automotive News
DETROIT -- Ford Motor Co.’s “Way Forward” plan calls for shutting down seven assembly plants and seven parts plants and cutting between 25,000 and 30,000 factory jobs by 2012.
But the plan also calls for more vehicles with hybrid powertrains, profits in the North American auto business by 2008 and the addition of a “low-cost manufacturing site” in the future.
Ford officials would not give more details about the new plant other than to say that the plant would be located in North America and that low cost was the highest priority. Mark Fields, Ford's president of the Americas, would not rule out a U.S. location for the plant.
Some, but not all, of the details of the plan were laid out Monday by CEO Bill Ford, COO Jim Padilla and Fields.
“The Way Forward contains some strong medicine for the North American business,” Bill Ford said.
The automaker, whose North American vehicle operations posted a pretax loss of $1.6 billion in 2005, said the plant closures will cut its assembly capacity by 1.2 million units, or 26 percent, by 2008.
Investors were encouraged by the plan. At the end of trading on Monday, Ford stock was up 38 cents to $8.28 a share.
“Our plants are running at 75 percent capacity use,” Fields said. “That is clearly unsustainable.”
Seven assembly plants will close, Ford said. But the automaker named only three of them:
St. Louis, which builds the Ford Explorer and the Mercury Mountaineer SUVs. It will close in the first quarter of this year.
Atlanta, which builds the Ford Taurus. The plant will close late in 2006. Taurus production is set to end on Aug. 31, sources have said.
Wixom, Mich., which builds the Lincoln LS, Lincoln Town Car and Ford GT. It will close in the second quarter of 2007.
Ford will reduce production at the St. Thomas, Ontario, assembly plant sometime in 2007, said Buzz Hargrove, president of the Canadian Auto Workers. That will cut jobs at the plant from 2,500 to 1,300, he said.
"Our people are devastated," Hargrove said. "Remember we got hit pretty hard already by Ford. ... Their credibility is really challenged here."
With Monday's announced cuts, Ford is on track to eliminate close to 4,000 CAW jobs since mid-2004 when an Oakville, Ontario, truck plant closed, Hargrove said. In contract negotiations last year, the CAW agreed to the closure of a casting plant in Windsor, Ontario.
News of the shift cut at St. Thomas comes on the heels of a $200 million investment planned for that plant in 2007. Ford told the CAW on Monday that it would go ahead with the investment and a freshening of the Ford Crown Victoria and Mercury Grand Marquis, Hargrove said.
Of the seven parts plants to close, Ford named only two:
The Batavia, Ohio, transmission plant that builds four-speed automatics used in the Ford Escape, Mercury Mariner and Mazda Tribute SUVs. It is also Ford’s only plant that builds continuously variable transmissions used in the Ford Five Hundred and Mercury Montego sedans and the Ford Freestyle sport wagon.
A casting plant in Windsor, Ontario.
In a statement, UAW President Ron Gettelfinger said the plant closings leave "a cloud hanging over the entire workforce" and will make the 2007 contract negotions "all the more difficult and all the more important."
He added, "Like the 2002 plan, Ford's new Way Forward is based on cutting jobs and closing facilities to align Ford's production capacity with shrinking demand for Ford's vehicles. Then, as now, the focus should instead be on striving to gain market share in this competitive market by offering consumers innovative and appealing products."
The Way Forward plan, which was developed over the past three months by Fields and Anne Stevens, COO of the Americas, covers all facets of Ford’s business. Specifics include:
Ford said it would reduce its corporate officer ranks by 12 percent by the end of the first quarter. The departure of six or seven officers will be announced Tuesday, Jan. 24, said Joe Laymon, Ford group vice president of corporate human resources and labor affairs. Ford currently has 53 officers.
Steve Lyons, group vice president of marketing, sales and service, will be one of the departing executives, sources have said.
White-collar layoffs also will occur throughout this week, said Laymon. Ford says it will reduce 4,000 salaried jobs during the first quarter of 2006.
Ford will not offer any earnings guidance for the future. The reason, Ford officials said, is so that executives have a long-term focus that will lead to sustainable profitability.
Cuts in material costs of at least $6 billion by 2010.
Capital expenditures of $7 billion by 2006.
Vehicle pricing that is closer to transaction prices, with smaller rebates. Said Fields: “We’re committed to this, even if the competition backslides.”
Offering hybrid technology on half the nameplates in the Ford, Mercury and Lincoln divisions. Hybrid versions of the Ford Five Hundred and Mercury Montego sedans and the Ford Edge and Lincoln MKX sport wagons will arrive between 2008 and 2010. Hybrids will be offered on the Ford Fusion and Mercury Milan sedans in 2008.
Increased spending on products, with more frequent styling freshenings. Ford said it will spend more money on the F-series truck lineup. Mercury products will get more expressive design, and the brand will offer a “unique purchase experience,” the automaker said.
Greater use of global vehicle platforms, especially for cars and sport wagons, and more sharing of components.
Dale Jewett and Amy Wilson
Automotive News
DETROIT -- Ford Motor Co.’s “Way Forward” plan calls for shutting down seven assembly plants and seven parts plants and cutting between 25,000 and 30,000 factory jobs by 2012.
But the plan also calls for more vehicles with hybrid powertrains, profits in the North American auto business by 2008 and the addition of a “low-cost manufacturing site” in the future.
Ford officials would not give more details about the new plant other than to say that the plant would be located in North America and that low cost was the highest priority. Mark Fields, Ford's president of the Americas, would not rule out a U.S. location for the plant.
Some, but not all, of the details of the plan were laid out Monday by CEO Bill Ford, COO Jim Padilla and Fields.
“The Way Forward contains some strong medicine for the North American business,” Bill Ford said.
The automaker, whose North American vehicle operations posted a pretax loss of $1.6 billion in 2005, said the plant closures will cut its assembly capacity by 1.2 million units, or 26 percent, by 2008.
Investors were encouraged by the plan. At the end of trading on Monday, Ford stock was up 38 cents to $8.28 a share.
“Our plants are running at 75 percent capacity use,” Fields said. “That is clearly unsustainable.”
Seven assembly plants will close, Ford said. But the automaker named only three of them:
St. Louis, which builds the Ford Explorer and the Mercury Mountaineer SUVs. It will close in the first quarter of this year.
Atlanta, which builds the Ford Taurus. The plant will close late in 2006. Taurus production is set to end on Aug. 31, sources have said.
Wixom, Mich., which builds the Lincoln LS, Lincoln Town Car and Ford GT. It will close in the second quarter of 2007.
Ford will reduce production at the St. Thomas, Ontario, assembly plant sometime in 2007, said Buzz Hargrove, president of the Canadian Auto Workers. That will cut jobs at the plant from 2,500 to 1,300, he said.
"Our people are devastated," Hargrove said. "Remember we got hit pretty hard already by Ford. ... Their credibility is really challenged here."
With Monday's announced cuts, Ford is on track to eliminate close to 4,000 CAW jobs since mid-2004 when an Oakville, Ontario, truck plant closed, Hargrove said. In contract negotiations last year, the CAW agreed to the closure of a casting plant in Windsor, Ontario.
News of the shift cut at St. Thomas comes on the heels of a $200 million investment planned for that plant in 2007. Ford told the CAW on Monday that it would go ahead with the investment and a freshening of the Ford Crown Victoria and Mercury Grand Marquis, Hargrove said.
Of the seven parts plants to close, Ford named only two:
The Batavia, Ohio, transmission plant that builds four-speed automatics used in the Ford Escape, Mercury Mariner and Mazda Tribute SUVs. It is also Ford’s only plant that builds continuously variable transmissions used in the Ford Five Hundred and Mercury Montego sedans and the Ford Freestyle sport wagon.
A casting plant in Windsor, Ontario.
In a statement, UAW President Ron Gettelfinger said the plant closings leave "a cloud hanging over the entire workforce" and will make the 2007 contract negotions "all the more difficult and all the more important."
He added, "Like the 2002 plan, Ford's new Way Forward is based on cutting jobs and closing facilities to align Ford's production capacity with shrinking demand for Ford's vehicles. Then, as now, the focus should instead be on striving to gain market share in this competitive market by offering consumers innovative and appealing products."
The Way Forward plan, which was developed over the past three months by Fields and Anne Stevens, COO of the Americas, covers all facets of Ford’s business. Specifics include:
Ford said it would reduce its corporate officer ranks by 12 percent by the end of the first quarter. The departure of six or seven officers will be announced Tuesday, Jan. 24, said Joe Laymon, Ford group vice president of corporate human resources and labor affairs. Ford currently has 53 officers.
Steve Lyons, group vice president of marketing, sales and service, will be one of the departing executives, sources have said.
White-collar layoffs also will occur throughout this week, said Laymon. Ford says it will reduce 4,000 salaried jobs during the first quarter of 2006.
Ford will not offer any earnings guidance for the future. The reason, Ford officials said, is so that executives have a long-term focus that will lead to sustainable profitability.
Cuts in material costs of at least $6 billion by 2010.
Capital expenditures of $7 billion by 2006.
Vehicle pricing that is closer to transaction prices, with smaller rebates. Said Fields: “We’re committed to this, even if the competition backslides.”
Offering hybrid technology on half the nameplates in the Ford, Mercury and Lincoln divisions. Hybrid versions of the Ford Five Hundred and Mercury Montego sedans and the Ford Edge and Lincoln MKX sport wagons will arrive between 2008 and 2010. Hybrids will be offered on the Ford Fusion and Mercury Milan sedans in 2008.
Increased spending on products, with more frequent styling freshenings. Ford said it will spend more money on the F-series truck lineup. Mercury products will get more expressive design, and the brand will offer a “unique purchase experience,” the automaker said.
Greater use of global vehicle platforms, especially for cars and sport wagons, and more sharing of components.