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Discussion Starter #1
Report: Ford likely to close five North American plants

Restructuring plan to be announced in January

Associated Press

DETROIT -- Ford Motor Co. is likely to close five North American plants as part of a still-evolving restructuring plan to be announced next month, according to a newspaper report published Friday.

While the plan is still being formulated and is subject to change, The Wall Street Journal reported that that nation's second biggest automaker is likely to close assembly plants in St. Louis, Atlanta and St. Paul, Minn. It cited two unidentified people familiar with the automaker's product plans.

The newspaper said an engine-parts plant in Windsor, Ontario, and a truck-assembly plant in Cuautitlan, Mexico, are also slated for closure.

Together, the plants employ about 7,500 workers, or 6 percent of Ford's North American work force.

"Obviously, we've indicated we will address our excess capacity," Ford spokesman Oscar Suris told The Associated Press on Friday. "We've been pretty consistent in saying we'll share these plans in more detail in January. Nothing is finalized."

The report comes a day after Ford said sales of its Ford, Lincoln and Mercury brands fell 18 percent in November, and it said it would produce 2.5 percent fewer vehicles in North America in the first quarter than it did last year.

Ford Chairman and CEO Bill Ford has said he plans to announce U.S. plant closings and layoffs in January.

The January restructuring plan will be the latest in a series of shake-ups and cost-cutting moves at the Dearborn-based automaker, which reported a third-quarter loss of $284 million. In North America, it lost $1.2 billion before taxes.

When the company announced the third-quarter results in October, Bill Ford said he planned to complete the restructuring plan in December and announce it in January.

Ford and other U.S. automakers have been hurt by competition from Asia as well as high health care and materials costs and bloated plant capacity.

On Thursday, Ford said its car sales slid 6 percent despite strong demand for the company's new Ford Fusion, Mercury Milan and Lincoln Zephyr sedans and a 46 percent increase in sales of the Ford Freestyle crossover. Sales of Ford trucks and sport utility vehicles slipped 22 percent, led by a 52 percent decline in sales of the newly redesigned Ford Explorer SUV.

Ford also said it plans to build 850,000 vehicles in North America in the first quarter, down 2.5 percent from a year ago. Ford said it will be increasing car production and lowering its output of trucks and SUVs.

Ford shares rose a penny to $8.10 in premarket trading.

7,859 Posts
Discussion Starter #2
Plant cities on edge as Ford gets closer to restructuring

Windsor plant among 5 named in news report as likely to close

By Dee-Ann Durbin / AP Auto Writer

DETROIT -- Ford Motor Co. workers and local officials said Friday they'll do everything in their power to keep plants open after a report suggested Ford is considering closing five North American plants as part of a major restructuring.

Lawmakers and union officials said they would pile on tax breaks or change plant work rules to encourage Ford to stay. In Minnesota, House Speaker Steve Sviggum, the Legislature's top Republican, said he wouldn't rule out pushing for a special session to consider incentives for keeping a plant in St. Paul.

"We're not going to let this go without a fight," he said. "We're going to give every incentive we can to make sure these jobs are maintained."

The Wall Street Journal reported Friday that the nation's second biggest automaker is likely to close assembly plants in St. Louis, Atlanta and St. Paul under a still-evolving restructuring plan. It cited two unidentified people familiar with the automaker's product plans.

The newspaper said an engine-parts plant in Windsor, Ontario, and a truck-assembly plant in Cuautitlan, Mexico, also are slated for closure.

If Ford closes the plants, it would deal another blow to U.S. autoworkers, already reeling from a plan announced last month by General Motors Corp. to close 12 North American facilities and cut 30,000 jobs. The nation's car manufacturers are suffering from declining sales, especially of sport utility vehicles, even as the cost of labor and health care rises.

Ford shares rose 5 cents to close at $8.15 on the New York Stock Exchange on Friday.

Together, the Ford plants cited in Friday's report employ around 7,000 people, according to Ford's Web site. Ford had a total of 122,877 North American employees at the end of last year. The Dearborn, Mich.-based automaker has around 324,000 employees worldwide.

Ford has been struggling with declining U.S. market share, high labor costs and excess plant capacity. The company reported a $1.2 billion pretax loss in its North American automotive operations in the third quarter.

Ford Chairman and CEO Bill Ford has said the company is working on a restructuring plan and will reveal details in January. Bill Ford said in October the plan will include "significant" job cuts and plant closures.

Ford is only using around 86 percent of its North American assembly plant capacity, compared to 107 percent at rival Toyota Motor Corp. Ford has 23 assembly plants in North America.

"Obviously, we've indicated we will address our excess capacity," Ford spokesman Oscar Suris told The Associated Press Friday. "We've been pretty consistent in saying we'll share these plans in more detail in January. Nothing is finalized."

The United Auto Workers refused to comment on the report, saying it is speculation.

At the Ford plant in Cuautitlan, just north of Mexico City, said rumors about downsizing have been floating around for some time, and the 750 workers there are willing to discuss labor changes to keep the plant open.

"We believe that we represent a good business opportunity for Ford," said Juan Jose Sosa, the national representative for the Ford workers union in Mexico. "We are open to considering reasonable alternatives ... and a better use of labor," he said.

Danny Sparks, head of the local union at the Ford plant in Hapeville, Ga., near Atlanta, said the report of a possible closure came as a surprise.

"We're one of the most efficient plants Ford has. The Atlanta employees have a long history of stepping up to the task at hand," Sparks said.

Chuck Moore, director of the Detroit-area restructuring firm Conway, MacKenzie and Dunleavy, said the plants are the subject of speculation in part because of the products they make.

The Atlanta plant makes the Ford Taurus sedan, which is scheduled to be phased out next year. The St. Louis plant makes the Ford Explorer and Mercury Mountaineer, two vehicles which have been struggling. Explorer sales were down 30 percent in the first 11 months of this year despite an extensive redesign, according to Autodata Corp.

The St. Paul plant makes the Ford Ranger pickup, which also saw sales fall nearly 25 percent between January and November, and the Cuautitlan plant makes the F-150 and Super-Duty trucks that could be consolidated elsewhere, Moore said. Ford has four other plants that make the F-150.

GM's announcement got little reaction from Wall Street, in part because many of the changes won't take place until after GM and the UAW negotiate a new contract in 2007. Moore said Ford could get the same reaction unless its restructuring plan takes effect sooner, although Ford also is locked into a UAW contract that won't be negotiated until 2007.

Moore said Ford also has to make clear how it plans to stem its market share losses. Ford's U.S. market share fell to 17.4 percent in the first 11 months of the year, down from 18.4 percent the year before.

"Without stabilization of the market share, it's just going to require additional cost cuts and additional closures," Moore said.

7,859 Posts
Discussion Starter #3
Ford's secret deal



While workers at Ford Motor Co.'s Wixom Assembly Plant cling to new hints that their plant will be spared in Ford's next round of cost cuts, the automaker revealed this week that it reached a secret agreement with the State of Georgia to expand a plant instead of closing it.

Ultimately, though, neither plant may be out of danger considering the automaker's dismal sales performance.

Ford, identified in court documents as "XYZ Corp.," has reached a secret 30-page preliminary agreement with Georgia to keep its Atlanta Assembly Plant open and expand it, in return for incentives such as grants, tax breaks and road improvements.

The deal was revealed during a court hearing in Georgia on Monday.

The incentive package, which remains under a court seal, needs to be approved by the state General Assembly.

Georgia's development office has agreed to ask the Legislature to change its laws governing tax breaks if Ford's board signs off on the deal, according to the Atlanta Journal-Constitution, which previously identified XYZ as Ford.

Ford's board of directors is slated to meet this upcoming week.

Workers at the Wixom Assembly Plant are hopeful that if the Georgia deal falls through, their facility could be spared for closure when Ford announces its "Way Forward" cost-cutting plan in January.

Atlanta builds the Ford Taurus and Mercury Sable; the Wixom plant builds the Ford GT and two Lincoln sedans, the Town Car and LS.

Ford officials refused to comment publicly on speculation about its plants, saying the company's restructuring plans will be announced in January.

Workers are trying to remain hopeful.

"I'm optimistic that it's true," said Paul Brown, 53, of Plymouth, who has worked at the Wixom plant since 1974.

Meanwhile, some automotive experts said they wouldn't be surprised to see Ford close both plants, despite suggestions in the Wall Street Journal and Automotive News that there will be an either-or choice between Atlanta and Wixom.

The Free Press already has identified other plants that are likely closure targets, including those in St. Louis, St. Paul, Minn., and Cuautitlan, Mexico.

Ford has far more plants than it needs, especially considering its plummeting sales.

Sales for the Dearborn-based automaker are off 4.6% for the year through November.

What's more, Ford has the capacity to build 4 million vehicles and sells less than 3.4 million a year.

When an automaker's plant doesn't produce all the vehicles or parts it can, the plant equipment is not being used efficiently and isn't paying for itself. It's the equivalent of an employer paying workers full-time pay for part-time work.

That is one of the factors causing problems in Ford's North American automotive operations, which have posted a $2.1-billion pretax loss through September.

Erich Merkle, a senior auto analyst with IRN Inc., an automotive research firm in Grand Rapids, said Ford has been "teetering back and forth" between Atlanta and Wixom. But, he noted: "I think it would probably make more sense to close both."

Ford never has announced plans to close the sprawling, 4.7-million-square-foot facility in Wixom. However, autoworkers there and experts who study the industry have long expected that the plant would be shuttered soon.

Some workers took news reports that their plant might remain open with a grain of salt.

Richard Abner, 48, of Romulus, has worked at the Wixom plant for 32 years and said he is suspicious of news Wixom will remain open.

"We don't believe it," he said. "We know something devastating is going to come down."

Even UAW Local 36 President Dave Berry was skeptical.

"It's a good rumor, but it's just that, a rumor."

Sandy Ring, chief operating officer of the Michigan Economic Development Corp., said he was "heartened" by the suggestion that Ford might keep Wixom open, but even he was uncertain how likely such a move would be.

"We've always been in talks with Ford," he said about keeping plants open in Michigan.

In Georgia, meanwhile, the likelihood that the incentive agreement will be approved also seemed sketchy, especially since details have not been publicly revealed to taxpayers.

Georgia officials have been negotiating the deal with Ford for 18 months, according to the Atlanta newspaper.

One of the problems facing the Atlanta plant, which is located in Hapeville, Ga., is that it is landlocked and does not have good access to parts from suppliers -- which might be addressed in the incentive package.

General Motors Corp. recently announced it would close its Doraville, Ga., plant, which employs more than 3,000 workers. The threat of also losing the Ford plant might inspire taxpayers and lawmakers to back an appealing incentive package.

7,859 Posts
Discussion Starter #4
Ford to close more than 8 plants: paper

FRANKFURT (Reuters) - Ford Motor Co plans to close more than eight North American assembly and parts plants in a drive to revive faltering operations on the continent, industry paper Automotive News reported on Monday.

Citing a "key company insider," the paper said the number-two U.S. carmaker was likely to close at least five vehicle assembly plants: in Atlanta; St. Louis; St. Paul, Minnesota; Wixom, Michigan; and Cuautitlan, Mexico.

Several powertrain and stamping plants will also close, it cited the unidentified source as saying based on his knowledge of a turnaround plan Ford is preparing and the group's overcapacity problems.

A Ford of Europe spokesman said he could not confirm the report and reiterated that the company would unveil its restructuring plan in January.

Ford has said it would unveil in January a restructuring plan for North America, dubbed "Way Forward," which Chief Executive Bill Ford Jr. has said would include plant closures.

Like General Motors Corp, Ford has seen its margins squeezed by soaring health-care and raw material costs and a decline in U.S. market share. So far this year, Ford's North American unit has lost over $1.4 billion before taxes.

GM has announced plans to cut 30,000 jobs through 2008 and close 12 facilities to reduce excess capacity.

In a separate interview with Automotive News, Bill Ford

declined to give details of what the restructuring plan will include other than to reiterate that the group would reduce capacity and focus on new products that could fuel demand.

He confirmed that he had approached "most of the top executives in this industry" over the past six or seven years about coming to work for Ford, but added he was intent on remaining in the top post for now.

"Look, I'm firmly committed to this job, this company, and I'm going to fight like mad to get this company back to where it deserves to be," he said.

Bill Ford said the company would feel the pinch on margins as customers increasingly shift into cars from more lucrative products such as sport utility vehicles.

"Obviously, the segmentation downshift, from a margin standpoint, is not a good one. But we've planned these vehicles from the start to be a much healthier business proposition than their predecessors were. But once you start coming down the price point curve, you clearly have lower margins," he said.

Over time, margins should start to converge as customers opt for added content on small and mid-sized cars, he added.
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