Ford, its profits dragged down by continuing poor performance in North America, will announce “significant” US plant closings and layoffs in January, according to the Associated Press.
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Ford chairman and CEO Bill Ford reportedly said he would complete the restructuring plan in December and announce it in January – the plan was painful but essential and would affect both salaried workers and hourly workers represented by the United Auto Workers.
“This is not a sacrifice we will ask only the UAW and its members to share. There will be sacrifices throughout the company, top to bottom,” Bill Ford said in a conference call with investors and media. “Our industry is beginning a dramatic restructuring which is sorely needed. While the challenges are great, so are the opportunities.”
“For all the progress, we recognise we’re very far from the finish line,” Bill Ford said, according to the Associated Press. “We need a dramatically different business structure and we need innovation to drive everything we do.”
He reportedly said the Dearborn-based company needs to align its plant capacity with its shrinking US market share, which was at 17.7% in the first nine months of 2005 compared to 18.4% in 2004.
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By GlobalDataAP noted he wouldn’t say how many plants need to close, but he said the company would keep enough capacity to meet its future sales goals.
“We are not going to shrink ourselves into oblivion. We think our plans are based upon what’s feasible to us,” Ford reportedly said.
According to the Associated Press, Ford chief financial officer Don LeClair said the company would reduce its staff by 10,000 people worldwide before the end of the year, including cuts of 2,750 US salaried workers, which would cost the company $700 million this year.
An agreement with Visteon to take back some unprofitable plants will cost Ford between $575 million and $625 million this year, although the company eventually expects to save millions on parts that Visteon supplies.
AO noted that, having said last month the company could announce restructuring plans when it released third-quarter earnings, Bill Ford said on Thursday that he wanted to give his new leadership team a chance to assess the plans – he appointed Mark Fields as president of the Americas in September and named Anne Stevens executive vice president and chief operating officer for the Americas last week.
According to the Associated Press, Bill Ford added that a significant amount of restructuring already has taken place this year, including the closure of a van plant in Lorain, Ohio which employed 1,700 people, and Ford also reached an agreement with the Canadian Auto Workers to close a plant in Ontario in 2007 or 2008.
