Ford Workers Brace For Bad News
Ford Motor Co. employees are bracing for thousands of jobs cuts in North America as the company embarks on a new restructuring plan.
Ford was set to announce details of the plan Monday morning in Dearborn, home of the 103-year-old automaker's headquarters.
Earlier Monday, Ford reported earnings of $2 billion in 2005, down 42 percent from last year's profit of $3.5 billion. It was the third straight year the automaker has reported a profit, but gains in Europe, Asia and elsewhere were offset by a loss of $1.6 billion in North American operations.
Those numbers were on the plus side in 2004, reports Jeff Gilbert of CBS radio station WWJ-AM.
Ford has refused to release details of the plan, dubbed the "Way Forward," which is expected to include plant closings, product changes and cuts to Ford's salaried ranks. Ford has approximately 87,000 hourly workers and 35,000 salaried workers in North America.
"Maybe I'll be happy, maybe I'll be sour, but I've had 29 years of good living from Ford, and if my plant closes, then, so it be," a worker at the Wixom Assembly Plant in Wixom, Mich. — one of the facilities analysts have speculated could be on the chopping block — told WWJ-AM.
The cutbacks are just the first step, said Catherine Madden, a senior analyst for Global Insight.
"It may be cliché at this point, but no doubt, product is king, and they need to establish what the Ford and Mercury and Lincoln brands are to the consumer," Madden told CBS Radio News.
The No. 2 U.S. automaker has been hurt by falling sales of its profitable sport utility vehicles, growing health care and materials costs and labor contracts that have limited its ability to close plants and cut jobs. The United Auto Workers union will have to agree to some of the changes Ford wants to make.
"We don't like to see any jobs go away," UAW President Ron Gettelfinger said last week. "We're always in hope that down the road we'll be able to reverse some of those decisions."
Ford also has seen its U.S. market share slide as a result of increasing competition from foreign rivals. The company suffered its tenth straight year of market share losses in the United States in 2005, and for the first time in 19 years, Ford lost its crown as America's best-selling brand to General Motors Corp.'s Chevrolet. Ford sold around 2.9 million vehicles for a market share of 17.4 percent in 2005, down from 18.3 percent the year before and 24 percent in 1990.
"Can Ford ever be what the Ford of 1955 was? Probably not. The postwar Ford probably won't exist in the same form, but I don't think it's too late," said Madden. The auto industry is no longer a "Big Three," but a "Big Six," she added, and Ford is still a significant automaker.
At Mr. Leon's Bar & Grille across the street from the Wixom Assembly Plant, workers eating breakfast Monday were nervously awaiting the news.
"People are really on edge," said autoworker Steve Singer, 48, of Novi. "We've had this over our heads for three or four years now."
Singer, who has more than 28 years in and is nearing retirement said he hopes the plant, which makes the Lincoln Town Car, the Lincoln LS and the Ford GT, can be retooled to build more popular models. But he said some supervisors already have transferred to a plant in Flat Rock, where the hot-selling Mustang is made, which he fears is a bad sign.
In St. Paul, Minn., Andy Lindee, who has worked at the Ford plant there for 27 years, said he just wants to know his fate. He and his co-workers have been frustrated by endless speculation over the plant's future, he said.
"It's nothing we can stop. If it's going to happen, it's going to happen," said Lindee, who works in the trim repair shop at the plant, which makes the Ford Ranger and the Mazda B-series.
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.
Ford used just 79 percent of its North American plant capacity in 2005, down from 86 percent in 2004, according to preliminary numbers released last week by Harbour Consulting Inc., a firm that measures plant productivity. By contrast, rival Toyota Motor Corp. was operating at full capacity.
Ford said in its earnings announcement Monday that it reduced employment in 2005 by 10,000 people due to layoffs, buyouts and attrition. Ford has around 300,000 employees worldwide.
States have been scrambling to offer tax credits and other incentives to keep Ford from closing their facilities ever since the automaker said last fall that it was developing a restructuring plan.
Earlier this month, Missouri Gov. Matt Blunt and other state officials flew to Ford's headquarters for a one-hour meeting with Ford executives. Michigan Gov. Jennifer Granholm outlined a package of incentives to Ford last week but said she wasn't given any assurance that Michigan plants would be spared.