Ford Announces Huge Job Cuts

All Hourly Workers To Be Offered Buyouts, Two More Plants To Close

(CBS/AP)  Ford Motor Co. said Friday that it plans to cut 10,000 more salaried jobs, offer buyouts to all hourly workers and shut down two more plants as part of a dramatic restructuring plan designed to rein in expenses and restore the struggling automaker to profitability.

The company said in a news release that it would shutter a stamping plant in Maumee, Ohio, in 2008 and an engine plant in Essex, Ontario, in 2007. In addition, an assembly plant in Norfolk, Va., will close in 2007, a year earlier than previously announced.

Ford said it would complete its cuts of 25,000 to 30,000 hourly jobs by the end of 2008, four years ahead of its previous target. Ford also said it already had cut 4,000 salaried positions in the first quarter of this year.

Ford lost $4 billion in the United States in the first half of the year as soaring gas prices sent sales of gas-guzzling trucks and SUVs into a nosedive. They account for a third of Ford's business — but are down 17 percent in 2006, reports CBS News correspondent Anthony Mason.

Ford's union contracts also are a big part of the problem. A Ford worker earns on average nearly $65 an hour. In contrast, Toyota pays its American workers just $45 an hour, Mason adds.

The bottom line is that nearly 45,000 salaried and manufacturing jobs will be gone, with two more plants added to Ford's closing list, reports Jeff Gilbert of CBS radio station WWJ-AM Detroit (audio). Most of the job cuts will be made through early retirements and buyouts, but Ford says there will need to be some "involuntary separations."

The company said the plan would cut about $5 billion in operating costs, mainly by offering early-retirement and buyout packages to all hourly workers and to white-collar employees. Ford plans to expand buyout and early-retirement offers to the company's U.S. hourly work force of more than 75,000 as part of the plan.

"This is an acknowledgement on the part of Ford they simply don't know what they are doing or what to do," Lou Dobbs, host of CNN's "Lou Dobbs Tonight," said on CBS News' The Early Show.

The plan was leaked Thursday when a Ford supervisor who was told of the plan by company officials gave details, and the greatly impacted United Auto Workers made an announcement.

Ford previously had announced plans to cut up to 30,000 hourly jobs by 2012. CBS News correspondent Anthony Mason reports that the 103-year-old automaker began the year with 82,000 employees, 6,500 of whom have already accepted buyouts.

When the dust settles, the change will be dramatic for the company that began as a daring adventure by Henry Ford and 11 business associates, with an investment of just $28,000.

By 2008, North American factory capacity will be reduced by 26 percent compared to 2005 levels, Ford said Friday.

"After this downsizing, Ford won't be the giant it once was," says auto industry analyst John Casesa. "It'll move from the second-largest manufacturer in North America to the third, fighting it out with the Hondas, Toyotas and Chryslers of this world instead of competing with General Motors."

It's also going to affect companies and communities far beyond the automaker.

"The state of Michigan is already hard-pressed. Workers there are simply reeling," Dobbs told Early Show co-anchor Hannah Storm. "The huge auto suppliers, Delphi and Visteon, which supply parts to Ford — we are talking about bankruptcy, rollbacks and the loss of jobs. No state in the union has been hit as hard as Michigan."

Under the buyout and early-retirement plan for hourly workers, detailed in a UAW statement, workers can choose among eight packages that offer from $35,000 to $140,000 depending on their years of service, age and how close they are to retirement age. Some packages require workers to give up health benefits.

Ford's board of directors, including new CEO Alan Mulally, on Thursday wrapped up a two-day meeting in which they considered and approved the latest phase of the company's effort to reduce its size and its costs.

Catherine Madden, an auto industry analyst at consulting firm Global Insight Inc., said although not all 75,000 workers will take the packages, the size of the offer illustrates the magnitude of Ford's troubles.

"No matter what, the number reflects the pressure the Ford Motor Co. is under right now," she said. "That's how significant the mounting pressures are on Ford."

The offers also show a realization of Ford's troubles by the UAW, which said in a statement that it agreed to the packages due to the "extraordinary circumstances in the domestic auto industry."

Ford had about 82,000 workers represented by the UAW at the end of last year, but about 6,500 have taken previous buyout and early retirement offers made mainly at plants already slated for closure, company spokeswoman Marcey Evans said Thursday.

UAW President Ron Gettelfinger said its members have made hard choices under difficult circumstances.

"Now, it's Ford Motor Co.'s responsibility to lead this company in a positive direction — which means using the skills, experience and dedication to quality that UAW members demonstrate every day in order to deliver quality vehicles to customers," Gettelfinger said in a statement.

Ford has been battered by the auto market's shift from trucks and sport utility vehicles to more fuel-efficient cars and crossovers. Its market share and sales have dropped while its Japanese competitors have gained.

The buyouts being offered are similar to those made earlier this year to hourly workers at the General Motors Corp., where 35,000 people have agreed to leave the company. Ford is the second-largest carmaker in the United States after GM.

The announcement also came as UAW local leaders at Ford plants gathered in Detroit to discuss Ford's financial situation and the buyouts.

"I think it's a good package," said Chris Kimmons, president of UAW Local 919 at the Norfolk, Va., assembly plant. "I think they worked real hard on it. They've got to do something to help Ford out of this crisis."

Separately, Ford said Thursday that Anne Stevens, an architect of the company's restructuring effort and one of the auto industry's highest ranking women, is retiring. Stevens, 57, had been at the center of Ford's turnaround efforts since October 2005, when she was named executive vice president.

[mycursor]

Does the $65./hour pay include benefits or is it the avg. wage for hourly workers at Ford?

[pagan121]

I WAS WATCHING THE EVENING NEWS ON SEPT 15 WHEN I SAW THE NEWS REPORT.$65 AN HOUR!!! I FLIPPED.
I'M A FORD TECHNICIAN WORKING PRIMARILY ON THE LINCOLN/MERCURY LINE. I KNEW THAT THEY WERE MAKING GOOD MONEY BUT COME ON.BUISNESS IS SLOW AT
THE DEALERSHIP. CARS ARE NOT SELLING. CARS ARE NOT COMING IN FOR REPAIRS. IF YOU THINK TECHNICIANS GET PAID GREAT. YOUR MISTAKEN. I MAKE
CLOSE TO $18 PER HOUR. SOUNDS GREAT!
NEWS FLASH!!!!! IF I DON'T TURN A WRENCH I MAKE NO MONEY!!
I CAN BE MAKING $100 AN HOUR IF I DON'T TURN A
WRENCH I STILL MAKE NO MONEY.
NO WONDER WE'RE IN TROUBLE.THE UNIONS, WORKERS,
MANAGEMENT AND FORD GOT US INTO THIS MESS.
HOW CAN YOU JUSTIFY TO ME $65 AN HOUR. I BET THE WORKERS STILL COMPLAIN HOW HARD THEY HAD IT.
I FEEL SORRY THAT PEOPLE ARE LOSING THEIR JOBS.
THEY HAVE FAMILIES. I KNOW WHAT IT IS.I'VE BEEN THERE. GET RID OF THE UNION, TAKE A PAY CUT AND LEARN TO LIVE FOR UNDER $20 PER HOUR.
I HOPE THE SALARY THAT THE NEW CEO IS MAKING HE CAN TURN THIS COMPANY AROUND IF NOT WE ARE ALL GOING TO BE LOOKING FOR A NEW JOB.

[thgdriver]

Ford got caught producing very large SUV's VAN's and sedans-- Lincoln Navagator, Mercury Mountaineer, Lincoln Town Car, Ford LTD, F250's and F350's and the like. Although they produce some small cars the big gas drinking machines are killing them. Look around whats on our highway's? Small foreign cars and pickup's that run forever on a gallon of gas. Ford, General Motors, Chrysler, they don't know what the HE-- hit them. I do, It was better management and forsight at Toyota, BMW, Honda, Misubishi, and all the rest. The price of a gallon of gas is killing Ford. The GOP and the Democrats called me the other day and asked for some campaign donations, I told the callers to call BP and Exxon, they got all my money month's ago!!

[nixonflower]

65$ an hour is false. Its 25$ plus retirement and benefits. If you have a 401k would you like what is matched included in your wage statement. Maybe a 401 is the way to go. Also when breaking down the cost of a car the newer foreign companys dont have the cost of retired workers. 3 times as many retirees as workers.
There are more complicated jobs but try putting on 1000 tires or 500 radiators in 8 hours, standing in the same 4 foot area having to ask to get drink or go to the bathroom. Mentally and physically taxing. Carpal tunnel from a keyboard?
The auto worker began losing ground with NAFTA. Buy your material in indosnesia assemble it in Mexico and sell your denims here. You may say "Its my choice" but what choice do you have when buying a TV, clothes ect. The unions may be old fashioned but some lost there lifes to give you the 40 hour work week and overtime ect.
Nobody will be able to afford anything when we are all Wall Mart greeters and burger flippers.
Example..Dont drive the Nissan, wear a cowboy hat and fly the stars and bars. What happened to the days when we were all PROUD TO BE AN AMERICAN?

[peaceforusa]

America would operate a whole lot better if there was one class of people. That would be Middle class. No poor people...no rich people. Just middle class americans making America work and working for America with everybody getting a fair shake at the American dream......I guess I will wake up now...must be dreamin! ;-)

[juliehg-2009]

I work for a national retailer. The rate of pay for the majority of associates, not executives mind you, but the people in the weeds, is a far cry from $65/hour. In reality, unless one has a 2nd income, it is nearly impossible to live on what we make. Yet, our company is going through divestiure and reorganiztion; over the next several years many, many people will fall prey to the almighty dollar and will be laid off. Our jobs will no longer be eliminated because it will no longer be "in the budget." All of this just to be "America's place to shop." The only we've failed to see is nothing seems to be happening to "the suits." If they want to be in the black, the right thing to do would be for them to suck it up and take cuts in pay so their associates won't lose their jobs. Do the right thing, simply because it's the right thing to do.

[nothappyatall]

Of course these auto companies have brainwashed the public into a mind set that they MUST have the latest styles, so they come out with the 2007 model in early 2006 as part of that.
They have the public hooked like a bunch of dumb sheeple replacing these $20,000 machines that devalue the minute you drive off the lot- every 5 years or so.

Be smart, but a good late model car in good shape instead of new, even if you had to install a rebuilt engine it's far cheaper. Ive never bought a new car and never will. My present 4 cyl 89 chevy corsica has 306,000 original miles on it, I bought it off a friend 6 years ago for $100 who used it to commute to work 50 miles one way a day but changed the oil every 2,000 miles.
I've put 25,000 on it, only repairs Ive done were minor- headlight switch, muffler twice, tires, tie rod ends, battery, starter and usual stuff like that- no engine or transmission work done to it.

It doesnt burn oil, it doesnt leak oil, it always starts right up, gets 38 mpg. Engine could go any time now with that many miles on it, but I could put a rebuilt engine in if I wanted to and it's good for many more miles.

[nothappyatall]

$65 AN HOUR???!!!!! what the hell??? it's no wonder those tin and plastic boxes on 4 wheels are priced 20 grand even with the "employee discount" and only last about 5 years before they rust out and need replacement.

That's insane, I had no idea, I figured MAYBE as much as $20 an hour, but no, these grease monkeys assembling cars are making way more than anyone else.
Yes, blame the unions and their demands, these jobs will go overseas eventually too like all the rest, it's why we dont MAKE anything any more in this country, not steel, not machinery, zippo- it all comes from China, Mexico etc

All I can say is when these dudes were raking in $65 an hour they'd better have stashed a lot of it away because their job is gone and no one is going to hir an "over qualified" worker whose last job paid $65 an hour and they are applying for one that pays $12.
Wonder how many are broke or with huge debts DESPITE $65 an hour...

[sharncedar]

"Don't cry the blues to me. I only WISH I was making 45 to 65 dollars per hour. You people have helped price yourselves out of the job market. "

No, you will cry the blues. Assembly workers in other countries live in dormitories with 8 workers in a room, work 12 hour shifts with no private lives allowed, and no dissent or comments allowed, for example a pretty girl must date the boss if asked, including your girlfriend and you don't say a word. So, anyone with any life better than that has priced themselves out of the job market too, haven't they, that's you too, smart guy. So don't sing the blues to me when you or your kids are reaping the economic staleness that comes as Americans are globally downsized in their paychecks. It will affect all the other businesses too, and the general standard of living in the whole country, or is that too complicated to understand.

[peaceforusa]

Greed has reared its ugly head once again. People need to learn that they don't need $65.00 an hour to live. All these people out there that help our American companies go broke by wanting such an outrageous hourly wage need to come down to the level of those of us making little more than minimum wage to see how it feels. The American companies are dying because of Greed. Anyone can work on an assembly line and should be making a decent wage because it is labor intensive, but the high wages they demanded has put Ford in the predicament they are in now. Soon there won't be anything made in America. It will all be foreign ***...

[newsjeff-2009]

I do have a suggestion for Ford Motor Company despite the fact that I have criticized them for "pricing themselves out of business by pricing vehicles way to high". My suggestion may not be one anyone wants to listen to but I will type it anyway. Business history in America has shown that a company that is in trouble can sometimes pull itself out of trouble if "all the employees of the company are united" and I do not mean just executives,vice-presidents,CEO's,hourly factory workers,sales people,dealerships,etc. I mean every single Ford Motor Company employee in all areas of the world. Ford employees worldwide(managers,vice presidents,executives,the CEO,salespeople,hourly workers,etc.) must work together to creative find ways to make the company profitable and make the company save money and explore all possible new product and service ideas and not overlook any new product or service idea. The main thing is all Ford Motor Company employees must work together even if it means pay or benefit cuts or longer work hours, it would be worth it to prevent the company from going bankrupt or closing entirely.

[newsjeff-2009]

This may sound like I am bashing organized labor or unions and siding with republicans, but if there are lots of positions at Ford Motor Company that are paying close to $65 dollars per hour even as a fold over rate or a rate that includes pay and benefits the union has priced themselves out of business like the company has. I read how Toyota,Honda and few other car company factories in America pay their workers $45 dollars an hour which may be pay and benefits but that is still more than a lot of college graduates in many states make, including my home state of Oklahoma, heck if a college graduate in OK and a few other smaller or southern states can make $20 or $25 per hour with benefits I consider that good since there is lots of young people coming out of college and high school evey year entering the workforce. I support "great pay and benefits" for American workers but not to the point were companies are going bankrupt and laying off all workers which has a "ripple effect in many states when they suffer massive layoffs."

[kap64]

I have two instances that turned me off from buying a new Ford off of the lot. First time, I was still deciding what to buy, saw a car I liked, and wanted to drive it. The salesman told me I couldn't drive it unless I planned on buying it that day. He said to come back when I was "serious" about buying it. OK, fine, I went down to the Chevy dealer and they offered to let me have the vehicle I was interested in for the whole weekend to try it out! Second time, I wanted a Crown Victoria, base model. I didn't want all of the bells and whistles, leather, etc. The salesman said "we don't stock them, only the LX models, people don't want them." He went on to tell me he could order me one if I really wanted one, but he would charge me sticker which would cost me more than the LX. So, I went down the road and bought something else. They don't seem too interested in selling the customer what he wants.

[ejstrom1]

the 65 bucks an hour is a number that includes fold over cost. not the actual salary.

[rabrabson]

Don't cry the blues to me. I only WISH I was making 45 to 65 dollars per hour. You people have helped price yourselves out of the job market. And your company did not have the foresight to diversify into a product line that would cover all interests not just the macho SUVs.

[jtyates1]

Everyone in my family, from close to distant, drives a vehicle made by Ford or Chevy.
We are Americans who buy American. We all bought from Wal-mart when it was the %u201CMade in America%u201D store with the %u201CMade in America%u201D banners everywhere. We quit buying from Wal-mart when that ended and it became the %u201CMade in China%u201D store.

Something the people in my family seem to all talk about is the fact that if you buy Ford or Chevy, it only takes a few years and the power windows stop working, the wind shield wipers malfunction, seats and door panels may fall apart or break, the radio may no longer work as it should, door locks may not work properly, and the list goes on.

We want quality. We don%u2019t want a car that falls apart when the warranty goes out. We want more gas mileage in bigger vehicles. Alternative fuels or power sources would be nice. As it stands, we have to watch everyone around us drive Mercedes, BMW, VW, Honda, Toyota, and a host of other vehicle brands that last longer and perform better then pretty much anything we can buy from an American car maker.

This is not acceptable. Even though we are big supporters of the home team, the home team is letting us down. We are United States citizens. We feel we deserve quality and workmanship. We are not going to continue to waste our money on vehicles that just don%u2019t work as expected.

[thblessed1]

A union can be a wonderful asset. It protects employees from unfairness and inequality. It also protects the employees who are inadequate, and it pressures corporations for more and more. Many union members have the attitude that a company owes them something, not that they owe the company, who is paying them to do a job. Most do not have college educations or specialized skills, they just got very lucky, and landed a great paying job with good benefits. They lack pride in their work. And unfortunately, the backlash is the corporations are forced to make major cut backs, because their product or service is poor and they are trying to meet the demands of the union and it's members. And the union loses money from the labor cuts, and the members are now desperately wanting there job back. I should know, I work for the U.S. Postal Service. It's heading in the same direction.

[charicia]

The Unions destroyed the steel industry in this country and now they are destroying the automobile industry. 99% of American workers have to bargain on an individual basis, learn new skills in order to get ahead and actually do this without having to resort to virtual blackmail for more pay as the Unions engage in. Now the Ford workers will have to go out and fend for themselves because they have destroyed the goose that laid the golden egg.

[odanada-2009]

I also had Ford sales staff try to hard sell me a more expensive vehicle. I've got an SUV for weekends and trips but wanted something cheap and small to drive to a from work at the lowest possible cost. He told me it was hardly worth his time to price out a Focus because the margins were so small but he was sure he could cut me a real good deal on some of the larger vehicles. They've got all these honkin' big gas guzzlers on the lot because the big guys in Detroit couldn't/wouldn't see what seemed obvious to the Europeans and East Asians. Not wanting to waste his time any longer I went down the road and bought a Hyundai Accent with all the bells and whistles, on the spot for next to nothing. Gas goes up and I don't go bankrupt.

[newsjeff-2009]

In my opinion Ford Motor Company is a lot like GOP republican leaders of this country. Ford Top Executives,vice-presidents, and the CEO do not have a clue what people want or need or they do not want to pay attention. I might need to rephrase that: which goes for Ford and GOP political leaders, they know and here but do not want to admitt that there cars and trucks are overpriced for many working-class Americans, of course our GOP controlled house and senate believes everything in America is going just fine for America to quote the president "jobs are plentiful and payrolls are up". It is funny how on many news networks including this one how the number of people working for lower wages and living in or near poverty level has increased rapidly in the past few years. I say Ford Executives are just like a lot of GOP politicans and even some democrats, they have so much money themselves they have not got a clue to the struggles of average lower and middle class Americans who struggle with high gas prices,rising utility costs,college tuition,rising mortgage rates,rising grocery and utility costs, ect.