Ford Slashes Jobs, Stock Rises

Now what?

This is the question facing thousands of Ford Motor autoworkers, in the wake of the company's announcement that it plans to close 14 plants over the next six years and eliminate as many as 30,000 jobs, half through attrition and half through layoffs.

Plants to be idled by 2008 include the St. Louis, Atlanta and Wixom assembly plants and Batavia Transmission in Ohio. Windsor Casting in Ontario also will be closed, as was previously announced following contract negotiations with the Canadian Auto Workers. Another two additional assembly plants to be idled will be determined later this year.

"These cuts are a painful last resort, and I'm deeply mindful of their impact," said Ford Chairman and Chief Executive Bill Ford, unveiling the "Way Forward" plan to boost profits. "In the long run we will create far more stable and secure jobs. We all have to change and we all have to sacrifice, but I believe this is the path to winning."

Shares of the nation's second-biggest auto maker rose on Monday's news, indicating some investors were pleased with the announcement, as well as with a larger-than-expected $124 million overall profit in the fourth quarter.

Ford shares rose 42 cents, or 5.3 percent, to close at $8.32 on the New York Stock Exchange. The quarter's profits came in large part because of the sale of its Hertz Corp. rental division.

"It's a step forward in the culture of Ford. Whether it translates into increased profits remains to be seen," said Brian Johnson, an auto analyst with Sanford Bernstein.

The restructuring is Ford's second in four years. Under the first plan, Ford closed five plants and cut 35,000 jobs, but its North American operations failed to turn around.

This time, CBS News correspondent Anthony Mason reports, the company plans to reemphasize design and innovation, and

In addition to the plant closings that have been announced, analysts also have predicted assembly plants in St. Paul, Minn., and Cuatitlan, Mexico, could be at risk for closure because of the products they make.

Some of the changes Ford plans to make are subject to union negotiations.

Under the company's existing contract with the United Auto Workers, workers at the idled plants will continue to get most of their pay and benefits until a new contract is negotiated next year.

Ford also plans to build one plant in North America, at a location yet to be announced, a plant that is being described as "a low-cost operation."

United Auto Workers President Ron Gettelfinger and Vice President Gerald Bantom say Ford's announcement is "extremely disappointing."

"The impacted hourly and salaried workers find themselves facing uncertain futures because of senior management's failure to halt Ford's sliding market share," they said in a statement. "The announcement has further left a cloud hanging over the entire work force because of pending future announcements of additional facilities to be closed at some point in the future."

The pair said Ford should be trying to gain market share, rather than aligning production capacity with shrinking demand for the company's vehicles.


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