Major news outlets are reporting that Ford will announce massive job cuts and plant closures on Monday, January 23. The Detroit News is reporting that 25,000 factory workers will lose their jobs with Ford over the next four years, and as many as 4,000 administrative and clerical workers will be laid-off by this April. It also said 10 plants could be closed under the plan, which follows a similar huge cost-cutting by General Motors, the world’s biggest car maker.
The job cuts were expected, however the magnitude certainly was not. Ford, which once held a 26% market share in the US, has seen it’s sales decline consistantly over the last ten years. It now holds just 17.4% of the US market and is in jeopardy of being surpassed by Toyota, the first time ever a foreign automaker would hold a top-three position in the American automotive market. Every percentage point of market share represents 170,000 vehicles.
Ford’s President, and great-grandson of Henry Ford, Bill Ford Jr. appears on the cover of this weeks Time magazine. He tells Time, “My goal is to fight Toyota and everyone else and come out on top. ”
Ford posted a net profit of $1.88 billion for the first nine months of 2005, but its North American unit has lost more than $1.4 billion before taxes. The numbers are expected to look even grimmer Monday when final 2005 financial results are reported.
Ford’s North American manufacturing operations still look a lot like they did when the company built one out of every four cars and trucks on the road. Ford has the factory capacity to build 4.5 million vehicles in North America, but produced just 3.3 million last year. As a result, Ford’s factory utilization rate is the lowest in the industry — just 79 percent, Harbour Consulting said last week. Analysts have identified several factories that could get the ax Monday. Ford assembly plants in St. Louis, Atlanta and St. Paul are in jeopardy, along with one in Cuatitlan, Mexico. Ford’s vastly underused plant in Wixom is also expected to be closed.
The Detroit News also reports that top executives will not be spared. Bill Ford also is expected to announce a significant reduction in the number of corporate officers at Ford by March 1, according to people familiar with the plan. One of those expected to leave is Steve Lyons, group vice president over sales and marketing for Ford, Lincoln and Mercury. He is negotiating to become a Ford dealer in Phoenix.
“This is the most serious crisis at Ford in modern times,” said David Cole, head of the Center for Automotive Research in Ann Arbor. “I think they view this as a last shot.”
The last Ford I owned was a 91 T-Bird SC. It was a great car until it was ’serviced’ (what a joke) by the now defunct Don Kott Ford dealership. The so-called ‘Ford certified mechanics’ (another joke) displayed attitudes, shoddy workmanship, arrogance and incompetence. It is highly unlikely I will buy another Ford. Too many bad experiences.
By papacito. January 29th, 2006 at 8:09 amIm a loyal ford owner, until recently their hasn’t been a new Ford that I would have purchased and it was sad to say. My present vehicals a 98 Ex-spoder is the worst car I ever purchased(poor enginering). I own a 99 F-150 that had a ton of minor problems that When I repaired them I found substandard parts from Taiwan, electrical connector and switches–The support I recieved from the ford dealer in my area sucks — They are more interested in trying to make big service sales than addressing my problems — That is another of Ford problems–The weeding out poor of the bad dealers- I can name at least two that have driven poeple away from purchasing new fords — My 2001 escort is like my 1996 escort one of the best cars you could own for reliabilty. So of course they discontinued it . Mr Ford needs to bring new ideas, and like his grandfather did , build cars that are reliable and ford tough. I think the new line up of Fords are getting better, and Im planning to buy a new Ford this spring maybe a 500 or a freestyle but time will only tell — While I love the GT40 it really doesn’t sell cars — The new Shelby Mustang will sell cars, more things like it will sell cars to the masses or brings them into your show room — Jim
By James D.Wood. January 27th, 2006 at 4:30 amMr. Ford will have to make good on his promise to provide Americans with quality, affordable, and environmentally concious vehicles. Americans don’t have to make all the cars we drive, Americans just need to make the good ones that fellow Americans will want to drive. Long-term strategic thinking will help. Ford like any American companies need to think and invest in the future of not just Americans but the world because others do and believe it or not world opinions make it to American lives, e.g. we need to be fuel-efficient and drive cars with better gas consumption. Ford needs to be the best not chasing after the rest which is what they have done.
By dat. January 23rd, 2006 at 3:08 pm