Posted on 09/15/2006 5:16:26 AM PDT by Mikey_1962
Cuts include 14,000 white collar jobs, fourth-quarter dividend; North American operations likely not profitable before 2009; market share expected to be around 15 percent
DETROIT -- Ford Motor Co. said today it will cut its operating costs by $5 billion and cut its salaried work force by one-third, or about 14,000 positions, as it speeds up its Way Forward restructuring plan.
Ford also said it will not pay a stock dividend for the fourth quarter, and will sell or close all former Visteon plants by the end of 2008 and close other plants.
The automaker now acknowledges that it won't return its North American automotive unit to profitability by the end of 2008 as previously planned. Because of further expected market share declines, Ford now says that full-year profitability for the unit is not expected before 2009.
That unit lost $1.6 billion before taxes in 2005. It lost another $1.3 billion before taxes and one-time charges through the first half of this year.
Market share for the Ford, Lincoln and Mercury brands will continue to fall, Ford said today. The combined market share of the three brands already has dropped by 1.1 percentage points through August, to 16.8 percent of the U.S. market.
Ford said today that U.S. market share of those brands will be in the low 16 percent range by the end of this year. Ford expects share to further fall to the 14 to 15 percent range in the future.
Ford will idle its Norfolk, Va., assembly plant in 2007, a year earlier than planned. That plant builds F-150 pickups.
A shift reduction is now planned for the Norfolk plant and the St. Paul, Minn., plant that builds the Ford Ranger pickup.
(Excerpt) Read more at autonews.com ...
It sounds like they've hired Mr. Mulaly to conduct Ford's funeral.
"...small business owners who often work doggedly for a lot less. And oh, they create jobs rather than cost them."
It was an observation, not an endorsement of unions. Everyone knows that management/employee relations is cyclic, and that when the cycle favors unions, business and often the economy suffers. The cycle now favors management.
Think of the cycle as releasing energy. If the cycle is stopped in favor of one group for a long period of time, bad things can happen. If it favors unions for too long, as it did in the 70s and 80s, businesses and the economy are significantly damaged. If it favors management too long, you have worker unrest and political upheaval.
"Actually, I think Ford is serious about competing with Toyota and Honda and is willing to endure the pain needed to get back on track.
GM, on the other hand, seems hopelessly lost."
It's really the other way around.
"Ford's assets don't just evaporate in a bankruptcy. Rather, they will be assigned to new and more deserving owners and managers. The employees will see to it that their own discomfort is limited in duration and scope ~ however, I'd move out of Greater Detroit."
I disagree. You're using zero sum. Are you a Marxist? Just as wealth can be created, it can be destroyed.
This is not a zero sum game.
4 - Those who have been stung by the quality of cars from the big three (or now big two). Are American cars much better than they used to be? Yes, but other manufacturers have improved too. People are often bitter for a long time after owning a rolling money pit.
"The last successful CAR Ford introduced was Taurus in 1985."
The new Mustang is quite a hit however it will probably not have long legs due to a limited market. My wife was looking for a crossover and tried the Freestyle. She found it harsh riding and noisy. Not to mention the styling...needless to say she didn't like it. One thing that might help American manufacturers is establishing an effective customer feedback mechanism. I sure would like to talk to the car designers. Sometimes you have to wonder what they are thinking. The new Mustang is the first good looking car that the "common" man can "afford" that Ford has made in more than a decade. Style sells, it is the most basic requirement of a successful vehicle. Performance, reliability, value must also follow.
"4 - Those who have been stung by the quality of cars from the big three (or now big two). Are American cars much better than they used to be? Yes, but other manufacturers have improved too. People are often bitter for a long time after owning a rolling money pit."
There is a difference between not buying a companies product and cheering their demise. Yes, you were bitten. I was too. But to be happy about Ford's current situation seems a little like cutting off your nose to spite your face.
I am a contractor, we are "disposable employees."
I took this assignment knowing that it can be terminated at any time, even if my performance is flawless. It just goes with the territory.
They did announce massive job cuts this morning, most will be early retirements, voluntary separations, but inevitably there will be involuntary separations.
It also should be noted the difference between those unions which can /will be excised because of a free market such as the UAW, Teamsters and the like, as opposed to the 'super protected, unions like the federally protected railroad workers that are tax-subsidized.
My next door neighbor is one such person - lives like a king, never gets dirty, and protected from cradle to grave.
Well, when they signed on to be big supporters of the Gay/Lesbian Movement, they lost tons of business.
I hate to see 14,000 Ford employees have to take a buy-out but I hope this helps Debbie Stabenow lose her Senate seat. Granholm is already a goner as far as the Governor's race.
Some of you Michiganders give us some input here.
Try reading the details of the exit package being offered. For example, four years at $27,000 per year and college education being completely paid for. This "patriot" thinks this option is better for America than paying $130,000 per year to sweep floors or paying "jobs bank" participants to do nothing.
I've got two new Fords in my garage and I've had very little problems at all. And I've owned about 15 new Fords and except for a 1991 model very little warranty work. I used to have GMs and they were nothing but trouble.
The problem is quite simple. They have rode the SUV and pickup wagon too long and it has gone over the cliff with the market. They should clone the Toyota Camry, Honda Accord or Hyundia Sonata and make it BETTER! for less money. They haven't had any cars that are truly competitive for years. The Fusion isn't even made in the U.S. It is made in Mexico. The Mustang can't carry an entire company.
As far as what I have, I have the Escape (my second) and an F-150 and they are nearly perfect but Ford abandoned the sedan market and that was their downfall.
"Obviously, today's announcement by Ford will negatively impact Granholm as many of the cuts, particularly the white collar ones, affect Michigan residents."
No doubt. Of course, she isn't running Ford. She isn't the one running an absolutely pathetic marketing division. She also isn't the one who decided not to invest in upgrading their car offerings (note: their reliability is actually pretty good - but their designs are stale)....
Michigan is just far too reliant on the auto industry. Not to quote Captain Obvious, but the entire state's economy (and state budget deficit/surplus) rely on the auto industry being in good shape.
The only "Fords" I would buy are a Jag or my Land Rover
Could this have anything to do with their new CEO? He did wonders at Boeing, maybe he can save Ford USA -- maybe they'll one day make a car I'd actually want to buy.
Sorry to disagree but companies exist for the benefit of their shareholders and, maybe, their customers. No more, no less.
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