US:Ford preparing to cut more jobs, reorganize
Ford preparing to cut more jobs, reorganize further in continuing drive to save money
AMY WILSON | Automotive News
DETROIT -- The consolidation of the Ford and Lincoln Mercury divisions is the first of many major changes at Ford Motor Co. designed to cut jobs and save money.
The company is spare with details, but sources say Ford wants to cut as much as 30 percent of its 35,000 salaried workers in the North American automotive business. Assembly plants also could be closed. Many of the salaried job cuts will unfold this year, though timing will vary by department.
The changes amount to a major overhaul of the turnaround plan that Ford launched in 2002.
Major restructurings are coming in all areas of the company, said Steve Lyons, Ford group vice president of North America marketing, sales and service, in an address to dealers last week. He announced the elimination of the company's long-standing Ford and Lincoln Mercury divisions in favor of a merged sales and marketing organization.
Ford faces severe losses in its North American automotive business. The unit posted a pretax loss of $907 million in the second quarter.
"There are compelling business reasons that require us to restructure and to reduce the number of people that we have, not just in marketing and sales, but in product development, in our manufacturing areas, frankly purchasing, every area that exists within our company," Lyons told dealers. "We are sizing ourselves to be consistent with the level of sales we produce and the profits we produce."
The sales and marketing consolidation is likely to trim about 20 percent of the organization's 3,500 salaried employees upfront, sources said. With subsequent attrition, as high as 30 percent of the jobs in sales and marketing could be eliminated over time, sources said. Ford officials won't confirm detailed job-cut targets.
'No easy way'
A few weeks ago, cuts were made in the public relations staff. In some cases, longtime employees were asked to pack their personal belongings before being escorted out of the building.
The methods have created anxiety in Dearborn.
"Some have asked me why we have had to ask employees to depart immediately," CEO Bill Ford wrote in an e-mail to employees last week. "Well, the management team has discussed this, and concluded that it's kinder to make our separations in this fashion, rather than have the employee remain in a difficult situation. Frankly, there's no easy way to do this."
There are more cutbacks to come throughout the company.
In product development, Ford is looking at reorganizing the four-cluster structure organized by vehicle type, sources say. The aim would be to remove any "fluff" within product development, one source said, without compromising new-vehicle programs. That means job reductions in product development could happen more gradually than in other departments.
Manufacturing is ripe for cutbacks. Ford is only using about 75 percent of its North American production capacity, company COO Jim Padilla has said. Plants in Wixom, Mich., which assembles the Lincoln LS, Town Car and Ford GT, and St. Louis, which assembles the Ford Explorer and Mercury Mountaineer SUVs, are leading candidates to close. Though closings are limited by Ford's contract with the UAW, the company could announce some plant closing targets by year end. The UAW contract expires in 2007.
The sales and marketing consolidation brings historic changes to Ford. The company has had separate Ford and Lincoln Mercury divisions since 1957.
Now Al Giombetti, who had been president of Lincoln Mercury, becomes vice president of sales for the three brands. Giombetti also has responsibility for dealer relations. Darryl Hazel, who had been president of Ford Division, becomes vice president of marketing for all three brands.
Dealers will see major consolidation, with 51 field offices reduced to 22. The Ford and Lincoln Mercury offices are being combined, and the number of regions drops from 17 to 11. The number of Ford Customer Service Division regional offices also drops from 17 to 11.
Ford has 1,550 employees in the field. Ford won't say how many will remain. Lyons told dealers that the changes should be in place by Sept. 30.
Ford executives stressed that brand identity will be protected in the new structure.
Dealers have adopted a wait-and-see approach to the changes. But some stand-alone Lincoln Mercury dealers are concerned that their needs might get overlooked.
"With (our own division) being gone, that creates a little bit of apprehension," said George Benson, president of Benson Lincoln-Mercury in Pittsburgh. "We're kind of hanging out there by ourselves."
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.....