More Jobs Lost as Industry Prepares for 2003

December 13, 2001

Sacramento - No matter how optimistic you'd like to be, the first half of 2003 looks like it will be filled with economic malaise. Realization of that is prompting numerous auto companies to prepare with increased belt tightening and more jobs cuts.

Our story began in Italy this past Tuesday, where following a board meeting of Fiat executives, extensive plans were made to cut what is sure to be a net loss for the company this year. The job cuts started right at the top with Roberto Testore, Fiat's chief executive for the last six years. He resigned Italian style, under advisement of the board. Along with him, 6,000 employees will be cut as manufacturing and assembly plants are shuttered.

Testore will be replaced by Giancarlo Boschetti, currently an exec with Fiat's heavy duty truck maker Iveco. Boschetti will oversee a major restructuring that is rumored to include the shutdown of 18 assembly plants worldwide over the next year.

In Detroit Monday, Delphi Automotive Systems said that it will be forced to cut another 1,400 jobs because of the gloomy economic outlook next year. Delphi says it believes the industry will sell two million less vehicles next year. The company has already closed seven of nine plants earmarked for shutdown and reduced its workforce by 8,500 people.

In Dearborn, things are so bad at Ford they don't know what to do. Remember the reorganization plan that former CEO Jacques Nasser was developing. It, apparently, is in the trash can. But Ford seems to be having a difficult time coming up with any kind of plan at all. There was word that a plan would be announced last week. Now insiders say it won't be until January that Ford will announce a restructuring plan that could see as many as 10,000-12,000 jobs being cut along with the shutdown of more assembly plants. There is also still talk about discarding the Mercury brand and in Europe Ford is reported to have hired Goldman Sachs to help find a partner or a buyer for its Kwik-Fit chain of repair shops.