Ford’s board of directors has been meeting to consider restructuring measures in North America that the company hopes will bring an end to its losses and decline in the US.
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The details of the Ford restructuring plan are unlikely to be known until next month, but at least eight assembly plants are at risk of closure as the company struggles to bring capacity more into line with demand. As many as 30,000 Ford factory workers could lose their jobs in the sweeping cost-cutting plans.
GM has already announced a similarly extensive North American cost-cutting strategy as Detroit continues to lose out to Asian rivals in its home market.
In the third quarter of this year Ford lost some US$1.2 billion on its North American automotive operations.
The restructuring plan, which will affect only hourly paid workers throughout North America, will be executed between next February and the end of 2011.
Leading the restructuring plan, dubbed ‘The Way Forward’, is Mark Fields, who was appointed Ford’s president of the Americas in September by chief executive Bill Ford in the company’s second management shake-up in less than two years.
In an e-mail to staff last week, Mr Fields insisted that the restructuring plan had not yet been finalised, although this week’s board meeting is expected to bring the process closer to completion.
Ford used only 86% of its North American assembly plant capacity in 2004 compared to rival Toyota, which is running at full capacity, according to the Harbour Report, which measures manufacturing productivity. Ford has around 23 assembly plants in North America.
A number of Ford plants appear especially vulnerable on model mix and low capacity utilisation grounds. Ford’s St. Louis plant in Missouri, which makes the struggling Ford Explorer and Mercury Mountaineer SUVs, is widely seen as a prime candidate for closure. Despite an extensive redesign, Explorer sales in the US were down 30 percent in the first 11 months of this year at 221,000 units.
Detroit-based CSM Worldwide analyst Mike Jackson told just-auto: “Ford certainly has an overcapacity issue in North America and a number of products have older lifecycles than competitors’ products in their respective segments. That has clearly led to a need to review Ford’s North American manufacturing footprint.
“As, for example, consumers move away from full-frame trucks to more car-like unibody SUVs, crossovers and MAVs, additional focus is required to get the manufacturing capacity into line with what the market wants.”
