Plant Closings and Job Cuts Loom As Ford Motor Co. Embarks on Restructuring Plan

DETROIT January 23, 2006; Dee-Ann Durbin writing for the AP reported that 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, Mich., home of the 103-year-old automaker's headquarters.

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.

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.

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.

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.

Ford Motor Co.: http://www.ford.com