Ford to Cut 35,000 Jobs Worldwide - Welcome William and Have A Nice Day

DEARBORN, Mich. AP Auto writer Ed Garsten reported that Ford Motor Co. plans to cut 35,000 jobs, or 10 percent of its work force, close five plants and eliminate four vehicles in a massive restructuring that its chief executive called a ``painful, but necessary'' effort to return the world's second biggest automaker to profitability

``We strayed from what got us to the top of the mountain, and it cost us greatly,'' chief executive William Clay Ford Jr. said Friday from company headquarters in announcing the plan.

The automaker said it was taking a $4.1 billion one-time charge to pay for its plan and hopes to reach $9 billion in profits by mid-decade.

Ford will close the Edison Assembly Plant in Edison, N.J., and the Ontario Truck Plant in Oakville, Ontario by 2004; the Cleveland Aluminum Casting in Brook Park, Ohio, in either 2003 or 2004; the St. Louis Assembly Plant in Hazelwood, Mo., by a date to be determined; and the Vulcan Forge in Dearborn, Mich., as soon as possible. About 21,000 of the job cuts are in North America.

The automaker will eliminate production of the Ford Escort, Mercury Cougar, Mercury Villager and Lincoln Continental this year.

The Escort at one time was Ford's best-selling car, but has been overshadowed by the subcompact Focus, which managed to lure a far younger audience and is the world's best-selling car. The Cougar, with its cat-eye headlights and wedge-shaped body, never reached any significant sales volumes.

The Continental, with its history of trendsetting and design, had survived for more than 60 years. In recent years Ford had tried to market the vehicle, which had appeal in among the 60-and-up driver, to a somewhat younger driver. The Lincoln LS sedan, which has been out about a year, is replacing the Continental as the automaker's top luxury model.

The Villager was built under a joint manufacturing arrangement with Nissan and at one time was Ford's luxury minivan. Its demise was previously announced.

The Canadian Auto Workers union, meanwhile, is threatening a potential strike to protect the 1,500-worker pickup truck factory in Ontario.

``The only weapon workers have . . . in bargaining is our right to withhold our labor,'' CAW President Buzz Hargrove told a news conference in Windsor, Ontario, shortly after Ford announced the massive restructuring.

``We will go to the bargaining table with Ford Motor Co. with a strike deadline, with one of our key demands being a continuation of the operations of Oakville Truck.''

The plan also includes the suspension of bonuses for company managers and the elimination of 401(k) matching contributions for employees.

In afternoon trading on the New York Stock Exchange, Ford shares were up 26 cents at $15.55.

The job cuts include 12,000 manufacturing jobs and 3,500 previously announced early retirements for white collar workers.

Ford employs approximately 345,000 people worldwide. It has 170,000 employees in North America and operates 47 plants there.

Ron Gettelfinger, vice president of the United Auto Workers, said Ford's restructuring will respect previously negotiated contract rights, including job placement protections.

``Ford has great strengths and resources to draw upon -- most importantly, an experienced, highly-skilled work force that's committed to improving product quality and customer satisfaction,'' Gettelfinger said in a statement.

Anaylst David Healy with Burnham Securities said the restructuring plan goes further than Wall Street anticipated.

``My impression of the overall program is it goes a lot deeper than I had expected and I think the long term results will probably be greater,'' Healy said. ``I think the news from now will be much better.''

The mayor of Edison flew to Michigan on Thursday in a last-ditch attempt to keep open his city's assembly plant, which employs about 1,500 hourly workers and primarily makes the Ford Ranger.

Mayor George Spadoro offered incentives including property tax discounts and breaks in utility bills. Ford had said last year that it would end the plant's second shift as of Feb. 4, eliminating about 630 hourly positions.

``This sort of loss -- a $100 million payroll, the ancillary vendors and suppliers that provide services and materials to this plant,'' Spadoro said. ``There's going to be a domino effect as a result.''

``I don't want to see anybody laid off,'' said Tony McKinnie, 47, an assembly worker at a plant in Wayne, Mich. ``I don't want to see plants closed. I want to see plants open, but I have to look at it from the company's perspective as well.

``Nobody wants this to happen, but unfortunately with the economy the way it is, you don't have much of a choice.''

For Ford, the sweeping restructuring represents a complete change from its position just a year ago, when it reported a $6.67 billion profit for 2000.

In the third quarter of 2001, Ford lost $692 million and when it releases its fourth quarter financial statement Jan. 17, it is expected to report its third straight losing quarter.

``For most of the last decade the Ford Motor Company was on a roll,'' William Ford said. ``The great success we enjoyed may have caused us to underestimate the strength of our competitors.''

``We realize that some of the things that must be done will be painful,'' said Ford, the great-grandson of founder Henry Ford. ``I can't begin to describe how sorry I am about that.''

Ford said he would accept no salary.

The automaker was hit hard by a self-inflicted financial wound in 2001 when it launched a $3 billion program to replace 13 million Firestone tires that were not recalled in the original recall that began in August 2000. The move resulted in the severing of Firestone's almost century-old relationship with Ford.

In July, much of Ford's top management was shaken up, and Nick Scheele, the man known for turning around Ford's European operations, took over North American operations.

The next month Ford announced it hoped to cut 4,000 to 5,000 salaried positions by offering early retirement and buyout packages.

By October, president and CEO Jacques Nasser was forced to resign and Ford replaced him as CEO. Scheele was elevated to chief operating officer.

Both Scheele and Ford have said the future for Ford is based on ``getting back to basics,'' in product development and improvements in quality and productivity.

Ford officials also have blamed high marketing costs related to a fourth-quarter incentive war for its difficult financial position.

Other automakers have gone through tough times as well.

At the North American International Auto Show earlier this week, General Motors Corp. vice chairman Robert Lutz said GM wants to cut about 4,700 jobs, or 10 percent of its North American white collar work force, through attrition and buyouts as part of its ongoing cost-cutting efforts. The No. 1 automaker also said it will delay handing out annual merit raises to employees until late 2002. GM traditionally gives out pay raises at midyear.

Last January, DaimlerChrysler AG announced it would cut 26,000 jobs, or about one-fifth of the work force of its financially-troubled Chrysler Group, over three years. The company also said it would idle six plants.