Ford Motor Co.'s Way Forward restructuring plan, barely eight months old, has been pulled way forward.
The plan to restore North American profitability to the Dearborn auto maker calls for additional plant closings, the shuttering or selling off of former Visteon Corp. plants, a 30% reduction in its salaried workforce and buyout offers to all of its United Auto Workers union employees.
These and other measures will result in reduced operating costs of about $5 billion by the end of 2008, the auto maker says.
The white-collar cuts, expected to be completed by the end of next year, calls for the elimination of an additional 10,000 positions on top of the 4,000 already announced in January at the onset of the original Way Forward plan.
These additional job cuts will be achieved through early retirements, voluntary separations and, if necessary, involuntary separations, Ford says.
The company also is pushing up its previously announced goal to shed 25,000 to 30,000 hourly jobs, originally set for 2012, to the end of 2008.
Ford says hourly workers will receive details on the buyout packages by mid-October, and those accepting the offers will leave the company by September 2007.
Ford has been attempting to sell off Automotive Components Holdings LLC, which is composed of 17 unwanted manufacturing plants and six other facilities acquired from Visteon last year. It now says if sales cannot be completed by the end of 2008, the plants will be closed. ACH employees will be offered buyout packages.
Meanwhile, Ford is moving up previously announced plant closings, which will bring the auto maker's North American production capacity to 3.6 million units by the end of 2008, down 26% vs. like-2005.
Facilities affected by the announcement include:
- Atlanta Assembly, to be idled in October 2006.
- Batavia Transmission, to be idled in 2008.
- Norfolk Assembly, to be idled in 2007, a year earlier than previously announced. The plant also will receive a shift reduction in January 2007.
- Twin Cities Assembly, to be idled in 2008, with a shift reduction set for 2007.
- Windsor Casting, to be idled in 2007.
- Wixom Assembly, to be idled in 2007.
Ford now adds two plants not mentioned in the original Way Forward plan: the Maumee, OH, stamping plant and Essex Engine Plant in Windsor, Ont., Canada.
Also, the Dearborn, MI, truck plant will add a third crew in 2007 for more F-150 production, which will make up for capacity lost with the closing of the Norfolk plant.
“These actions have painful consequences for communities and many of our loyal employees,” says Executive Chairman Bill Ford in a statement.
“But rapid shifts in consumer demand that affect our product mix, and continued high prices for commodities, mean we must continue working quickly and decisively to fix our business.”
The moves are meant to right-size the company, says Mark Fields, president-The Americas, as Ford loses market share. Ford and Lincoln U.S. share is projected to be in the low 16% range at the end of 2006 and continue to drop to 14%-15%.
