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First GM, now ...Ford to cut up to 30,000 jobs

Discussion in 'The Lounge' started by grimjaw, Jan 23, 2006.

  1. grimjaw

    grimjaw 1/2 ton status

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    Ford to cut up to 30,000 jobs
    No. 2 automaker to close 14 North American manufacturing plants in effort to stem losses.
    By Chris Isidore, CNNMoney.com senior writer
    January 23, 2006: 3:46 PM EST


    NEW YORK (CNNMoney.com) - Ford Motor Co. said Monday it plans to close 14 manufacturing plants in North America and cut between 25,000 to 30,000 jobs by 2012 as it tries to stem losses and adjust to its new, significantly lower market share.
    The nation's No. 2 automaker said that it will close a total of seven North American assembly plants. Three U.S. assembly plants identified for closing in the next three years are in St. Louis, Wixom, Mich., and Atlanta. Two other assembly plants yet to be determined will also be closed by 2008, while Ford's St. Thomas, Ontario assembly plant, with nearly 2,600 employees, will lose one of its two shifts.
    [​IMG][​IMG]The Ford Wixom plant is one of three U.S. assembly plants identified for closing Monday.[​IMG] Quick Vote
    What would it take to get you to buy a Ford vehicle?
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    Video[​IMG] More video
    [​IMG] Ford Motor Company CEO Bill Ford announces a restructuring plan that includes job cuts, plant closings.(January 23)Play video


    Video[​IMG] More video
    [​IMG] Ford Motor is closing plants across North America and cutting thousands of jobs. CNN's Ali Velshi reports (January 23)Play video


    The seven other plants to be closed are powertrain and stamping plants, such as the Batavia, Ohio, transmission plant, with more than 1,700 employees.
    The cuts will trim Ford (up $0.45 to $8.35, Research)'s North American capacity by more than a quarter, or 1.2 million vehicles. Ford's North American plants ran at about 75 percent of capacity in 2005, according to Mark Fields, the president of Ford's operations in the Americas.
    "That is clearly unsustainable," he said.
    But even with the reduced capacity, Ford will have North American capacity of about 3.4 million vehicles, or about the same number of vehicles it sold in North America in 2005, and some of those sales are from its import brands like Volvo and Land Rover. Some experts said that while Monday's announcement is a step in the right direction for the troubled automaker, it may not be enough.
    "I think they were a bit more aggressive than some on Wall Street expected. But it sounds like they're still going to be out of line," said Walter McManus, director of Office for the Study of Automotive Transportation at the University of Michigan "They talk about their (market) share stabilizing in the near term. But I think they'll lose share this year."
    "They're not turning out nearly as much new product this year as the competition is," McManus added. "They already have the oldest cars and trucks in showrooms of any of the top six manufacturers."
    Deep cuts in current work force
    The cuts represent about 18 to 21 percent of the employees in its North American auto operations. The closings will cut even deeper into U.S. hourly employment of 82,000, though the exact percentage is not yet known.
    But the cuts won't come immediately. Some will not take effect until six or more years from now, and many will be accomplished through attrition and retirement. Ford has a contract with the United Auto Workers union that runs through September 2007 requiring laid-off employees to be paid nearly their full pay. That will require Ford to offer buyout packages to many of the employees who are laid off in order to accomplish the cuts.
    Don Leclair, Ford's Chief Financial Officer, said about half the cuts would likely be accomplished through normal retirement and attrition, while half will be accomplished through "inducements."
    UAW President Ron Gettelfinger issued a statement saying that the Ford announcement was "extremely disappointing and devastating."
    "The announcement has further left a cloud hanging over the entire work force because of pending future announcements of additional facilities to be closed at some point in the future," said the union statement. "Certainly, today's announcement will only make the 2007 negotiations all the more difficult and all the more important."
    Local government officials had lobbied Ford to try to keep their plants off the closing list, but in the end the plant closings announced Monday were not a surprise. In fact, the St. Louis plant had been targeted for closing in the last restructuring at Ford in 2002 before it was given a temporary reprieve.
    Shares of Ford, which were up in early trading on better-than-expected fourth-quarter financial results, gained more following the mid-morning announcement giving details of the already anticipated plant closings and job cuts, although they were off their highs in early-afternoon trading.
    Cuts in management, new plant promised
    Ford did promise that it would make new cuts in management, trimming its officer ranks by 12 percent and its salaried work force by about 4,000 in the first quarter of this year. And while it gave no details on timing or size, it said it planned to build a new low-cost manufacturing site as part of the restructuring plan.
    The company said it also plans to trim $6 billion a year from the cost of its material purchases by entering into new agreements with suppliers and using common parts on most vehicles.
    Chairman and CEO Bill Ford said the cuts would be painful, but are necessary in order to respond to customer demands. He admitted that Ford had been hurt by the customer shift away from large-size SUVs, leaving Ford with too much capacity of the large, less fuel-efficient vehicles.
    "If we build it, they'll buy it. That's business as usual and it's wrong," Ford said. "Our product plans for too long have been defined by our capacity. That's why we must reduce capacity in North America."
    The St. Louis plant, with about 1,500 employees, makes the Ford Explorer and its Mercury twin, the Mountaineer.
    Ford promised that the company would make 250,000 fuel-efficient gas-electric hybrid vehicles annually by the end of the decade. Mark Fields, the president of Ford's operations in the Americas, said Ford would make a new push to try to capture the small car segment, in which it had trouble making money in the past.
    The other two plants identified for closing are the Wixom plant, which has about 1,600 employees and makes the Lincoln LS and Lincoln Town Car, as well as the Ford GT, and the Atlanta plant, with about 2,000 employees, that makes the Taurus.
    Declining market share
    Ford has seen U.S. auto sales fall each of the last six years, and its overall U.S. sales are now down more than 1 million vehicles, or 26.6 percent, since 1999. In 2005 alone, Ford's sales fell nearly 5 percent to less than 18 percent of the market, the 11th straight year it has lost share. It's had about 25 percent of U.S. sales as recently as 1998.
    Bill Ford told analysts hearing the details of the restructuring plan that the company would no longer give annual earnings targets or guidance, saying that was needed to change the company's focus from the short term to the long term.
    "We can not succeed in the long run if we're only focused on the short term," said Ford.
    But Fields, a key architect of the turnaround plan, did pledge to analysts that the company would return North American automotive operations to profitability by 2008, and to stabilize U.S. market share at current levels.
    Fields repeated his previous statement that the company needed to "change or die."
    "I thought that was an appropriate phase," said David Cole, chairman of the Center for Automotive Research. "They have to change pretty substantially."
    Cole said that plans by Ford executives to have quicker vehicle design and more flexible manufacturing plants are as important as the amount of capacity that is closed.
    "If they're successful at getting leaner and more flexible as they talk about, it gives them ability to adapt to the market," said Cole.
     
  2. ratzila

    ratzila 1/2 ton status

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    What happened to the $600,000 that the guy spent on the 2007 shelby cobra :whistle:
     
  3. divorced

    divorced 3/4 ton status

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    I'm tired of reading about the ungrateful overpaid autoworker in the paper every few weeks. At least after all the american plants close I won't have to read about how they don't like their pension plan or the brand ketchup in the break room. It isn't completely the autoworkers fault for putting themselves out of a job, but they haven't done much to help keep it either. Our government, lawyers, and environmental groups are responsible for most factory closings in the US.
     
  4. grimjaw

    grimjaw 1/2 ton status

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    Atlanta, Ga is getting nailed. They are losing a GM plant and a Ford plant within the next 2-3 years. Thats about 6000 direct jobs, and who knows how many indirect jobs lost.
     
  5. cbbr

    cbbr 1 ton status GMOTM Winner

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    There will be nothing left to negotiate if the car companies don't get a handle on the wages and costs.
     
  6. Z3PR

    Z3PR Banned

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    Heard about Ford cutting 30,000 employees about 6 months ago.
     
  7. cbbr

    cbbr 1 ton status GMOTM Winner

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    So is this 30000 more or wass that just the anticipation of this move? I don't remember seeing it before.
     
  8. boggerless

    boggerless 1 ton status Premium Member

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    your right,getting paid $26.00 an hour to put a bolt in a hole is way to much.alot of my family work for the big three. between the union asking for more all the time and the global market,AND people not buying american. this is it kids,it ain't gonna gat better just worse.we have reached the ceiling.the union is on its way out boys and girls.we can't function as a nation if we are all victoms of the man.any job where you can't get fired for doing drugs on the job 6 TIMES and still have the company pay for your re-hab is gone.and it should be.we are about twenty years away from being a third world country. china is gonna kick our ass economicly, they are starving for work and most folks here think the company owes them a job:rolleyes: . well get ready for the sh..ty times my friend. AND alot of peeps should have bought AMERICAN.
     
  9. diesel4me

    diesel4me 1 ton status Premium Member

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    20 years..

    I don't think 20 years is accurate..many areas resemble third world countries already,complete with the third world people living in them..I'd guess 10 years might be a more plausible guess,if things keep going the way they have the past 20 years..the USA is doomed,IMO,its only a matter of time..we let our country get taken over ,and all our jobs went overseas,and everyone buys cheap forigen goods...yes,more of us SHOULD have "bought American",and we wouldn't be in this mess..too bad many of us had little choice but to buy the cheep china crap,since our wages were so low,we couldn't afford the "good" American brand....

    My dad saw this coming..so did his dad,and his dad..but this time,its reached the limit I'm afraid..the USA will be in name only..china will be pulling the strings,and we will just be puppets..I hope I'm wrong..if only our "leaders" would stop giving our country away to everyone else but its own people,we might be able to save it.. :crazy:
     
  10. divorced

    divorced 3/4 ton status

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    I'm a youngster, so forgive me if I'm wrong on this, but wasn't there a day when all you could buy was American? And China crap was rare to nonexistant? And people could afford to buy American goods?

    I wonder what has changed that put us in the situation we have today? Is it just a few things or a more complex matter with many contributing factors?



    And while we're on the subject of American manufacturing, and a future lack thereof, a HUGE problem I see with all the manufacturing going overseas is that when we need certain items, like maybe tanks, H1's, jets, helicopters, guns, ammo, etc... where will we get them? We will have lost our manufacturing base, we won't be able to make sh!t. Maybe by then Wal-Mart will have a deal with China to buy defense items like this! :angry1: :angry1: :angry1:





    Where did we go wrong? :confused:









    .
     
  11. Resurrection_Joe

    Resurrection_Joe 1 ton status

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    We got lazy, greedy, and infatuated with instant gratification
     
  12. diesel4me

    diesel4me 1 ton status Premium Member

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    our big mistakes..

    We made a few BIG mistakes..like not putting our own goods first!..and also,not making forigen countries pay tarriffs on imported goods,equal to what WE pay THEM to sell our products in their countries!..

    While I was growing up,"Made In Japan" was synonomous with "JUNK"..and most loyal Americans who hadn't yet forgotten WW2 (or the loved ones lost in it) never bought anything stamped as such..then,as time wore on,those people died off..now we don't care WHO made it..as long as its CHEAP,thats all we care about..PRICE!..Quality is not a high priority anymore..

    Yes,our government will be in deep doo-doo if another war that needs tanks,planes,and other stuff like that built..and even if they did have the factories,who will work in them??..mexicans?..aisians?..I bet we run out of Americans by then..won't be any left..

    Maybe Ford and GM should switch over to military production now...it would save jobs,and might even save our economy..but the next war wont need tanks ,planes,and ships..it will consist of a button being pushed,and a big flash,and it will all be over...

    I heard Ford is going to focus on selling "Hybrid Vehicles" and cars that "Appeal To Women" on the TV news ...:rolleyes: ..ya,that'll improve bussiness..

    I never was a large fan of Fords anyhow..my Contour lost its rear brakes due to rusted steel brake lines the other day..and they are routed BEHIND the gas tank and rear end,in typical PITA Ford fashion,a bitch to fix!with "bubble flared" lines...can't get the blower motor to come on past "low" either.. GGRRRR!...:mad: ...

    Fords always did seem to break down more often,and harder to work on than most any other make..maybe its time to say good riddance,and not goodbye to Fords??..:crazy:
     
  13. Greg72

    Greg72 "Might As Well..." Staff Member Super Moderator

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    I don't know if I agree completely with that. When the Japanese first started selling cars in the US, they were terrible....unreliable, and with poor build quality. BUT, the Japanese did something that US companies could have learned from....they kept improving and innovating. The term "continuous process improvement" may not have been invented in Japan, but it is certainly a part of their business culture.

    Over time, the big three stopped laughing so hard at the "little Japanese cars" that were coming here. The quality had improved, the final product looked and performed well, and people were willing to spend money to own them.

    There is a lot of arrogance at the highest levels of the Big Three...maybe it's because the government has been helping them along for so many years? It seems the expression "Buy American!" is used to guilt Americans into buying inferior products that don't retain their value. Sorry fellas, there IS competition out there, and it takes more than empty rhetoric to get me to spend my money on your product.

    Personally, I can't afford to buy American cars.....they are expensive to start with, depreciate insanely fast (especially when compared to the Japanese counterparts) and they certainly don't lead the way in quality either. The real "cost of ownership" is simply too high.....



    That said, I do own 4 Chevys, but nothing newer than 33 years old. :usaflag:
     
  14. cbbr

    cbbr 1 ton status GMOTM Winner

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    I agree. My foreign made car is much higher quality, gets better mileage, is more comfortable and retains resale value much better than any comprabably priced American made vehicle. As long as this is true, I will continue to buy foreign made cars. I would love to buy American, I just can't justify it.
     
  15. Z3PR

    Z3PR Banned

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    Chrysler just announced they will be closing a few plants also.
     
  16. divorced

    divorced 3/4 ton status

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    Higher quaility or not, I value my life. I need to have a huge pile-o-crap American made hunk of iron under my a$$ to feel safe anymore. With the horrible driving habits of people today, and the way that testosterone-inflammed-ego brainless douche bags rip around in their BIG Stoopid Duty thinking because they have a big engine and can pull a big trailer they own the road or the stupid b!tch that has her old man buy her a cool H2 and she continues to drive it like her beamer... no, thanks. I'll continue to surround myself in a vehicle made of iron, and a lot of it.

    Edit - this was not meant to flame you, but rather to rant on the morons I must share the road with and explain why I like my large trucks.
     
  17. cbbr

    cbbr 1 ton status GMOTM Winner

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    I drive a car for mileage. My wife and kids are in an Expedition for weight/protection. I could not agree more that people are idiots and Detroit still makes the best fullsize SUV's and trucks for the $$ in my opinion.

    Of course that is part of their problem - they quit competing in the car market and relied on truck and SUV sales. Once gas got up to $2.30 a gallon, people started to rethink those bigger vehicles, sales dropped and they had nothing to fall back on.
     

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