US:Ford vows thorough overhaul
Ford vows thorough overhaul
Latest restructuring in works at the struggling carmaker will go beyond cutting costs, CEO says.
By Christine Tierney / The Detroit News
Ford Motor Co. will announce its second major restructuring plan in four years by the end of fall -- and it will not be limited to cost-cutting, said CEO Bill Ford Jr.
"It will be a rather comprehensive announcement," Ford said. "It will encompass a lot of things," including a more competitive business model and initiatives "that will surprise people positively."
Ford is struggling through a difficult stretch in the U.S. auto industry that has also hobbled its larger rival General Motors Corp. Both automakers are grappling with rising health care and pension obligations as well as diminishing shares of the cutthroat U.S. auto market.
Ford recently abandoned a goal to generate $7 billion in annual pre-tax income by 2006, and the automaker ran up a $907 million pre-tax loss in the second quarter. Chief Financial Officer Don Leclair said in July the company was drafting a restructuring plan in which "everything is on the table."
Ford is already stepping up white collar job cuts by up to 30 percent in some departments. It is also scaling back benefits to salaried workers and preparing to negotiate some plant closures with the United Auto Workers union.
But Bill Ford stressed that the recovery effort entailed more than just "cutting, cutting, cutting."
He said he was confident in the company's top managers and the new models the automaker was introducing, including fuel-efficient vehicles such as the mid-size Ford Fusion and Mercury Milan cars likely to appeal to consumers rattled by surging gas prices.
"We do have the talent," he said. "What we're facing, although very difficult, is something that we absolutely can and will emerge from."
Some analysts said they were encouraged by the company's commitment to take serious action.
"In the intermediate term, we believe that Ford could begin to experience material benefits from its new products and from restructuring actions," Deutsche Bank auto analyst Rod Lache said in a recent research note.
In recent months, Ford has made few public statements, but he spoke with reporters Tuesday after his appointment as the new chairman of the Detroit Economic Club, succeeding Chrysler Group CEO Dieter Zetsche.
Ford said the automaker has been surprised by the rapid surge in gas prices, which have risen to $3 a gallon in some parts of the country, but he said it had foreseen the trend.
"All you had to ask yourself is, 'is it likely long-term that oil is going to be more plentiful and cheaper,' and the answer is no," he said. "Therefore we headed down this road, and I actually feel good about what we've got coming now because it's hitting the market at the right time."
Ford has said he would not pare investment in new vehicles and technologies as part of the cost cuts, and the company has boosted staff levels in design and alternative fuel technology development
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.....