Ford Motors to cut 25-30,000 jobs.

[Dino Scuderia]

Another phase of suffering sales.

Ford to Announce Job Cuts Today Following 4th-Quarter Earnings ListenListen

Jan. 23 (Bloomberg) -- Ford Motor Co., the second-largest U.S. automaker, today announces plans to eliminate jobs and close plants in North America as it tries to stem losses at its largest automotive unit.

The restructuring, Chief Executive Officer William Clay Ford Jr.'s second in four years, will include job cuts of 25,000 or more, people familiar with the plan said last week. The announcement comes three hours after Dearborn, Michigan-based Ford announces fourth-quarter and year-end earnings.

Bill Ford is counting on the job reductions, the most extensive since his first reorganization in 2002, to help revive the company's North American auto unit following losses in four of five quarters through last year's third quarter. Ford's North American plants have become increasingly idle in the past year as its U.S. sales and market share fell.

``It's going to be an ugly day,'' said auto analyst Erich Merkle at consulting firm IRN Inc. in Grand Rapids, Michigan. ``People are going to be asking how deep are these cuts and is it enough.''

The company has already said it's cutting 4,000 salaried jobs during the first quarter. Ford shares, which dropped 47 percent last year, fell 32 cents to $7.90 in New York Stock Exchange composite trading on Jan. 20.

Ford and General Motors Corp., the world's biggest carmaker, have been losing market share to Asian rivals led by Toyota Motor Corp., while DaimlerChrysler AG's Auburn Hills, Michigan-based Chrysler unit has boosted its share of U.S. sales for two straight years.

Sales Slide

Toyota, which passed Ford as the world's No. 2 automaker in 2003, posted a 9.7 percent increase in U.S. sales in 2005, compared with an industrywide gain of 0.5 percent. Ford's sales fell 5 percent, and its share of the U.S. market slid to 18.6 percent in 2005 from 25.7 percent in 1995, the last year the company had a U.S. share gain. GM's market share, at 26.2 percent in 2005, is at an 80-year low.

``GM is about to go to the size of Ford, and Ford is going to the size of Chrysler,'' said Sean McAlinden, an analyst with the Center for Automotive Research in Ann Arbor, Michigan. ``If Chrysler has some hot products in the next 12 months, they may get bigger than Ford.''

Ford reports earnings at 7:30 a.m. Detroit time. The company was projected to post a profit of 1 cent a share, the average estimate of 17 analysts surveyed by Thomson Financial. The figures exclude costs and gains the company considers one-time items.

Ford hasn't said whether the fourth-quarter results will include job-cutting costs related to the North American restructuring. Ford said in December it expects to report a pretax gain of $1.1 billion to $1.3 billion on the sale of its Hertz Corp. rental-car unit to a group of investors.

Closure

Ford is calling its restructuring plan the ``Way Forward.'' Bill Ford in September put Executive Vice President Mark Fields in charge of the company's Americas unit and the reorganization. Fields began on Oct. 1, continuing work the automaker had begun under his predecessor, Greg Smith, who is now vice chairman. The only plant closure that Ford has identified so far is for an engine parts factory in Windsor, Ontario.

Ford produced 3.3 million vehicles in North America, using about 79 percent of its production capacity last year, according to Harbour Consulting of Troy, Michigan. That ranks it last in capacity utilization among six automakers surveyed by Harbour. Toyota was No. 1 at 111 percent, including overtime.

Factories

Among the vehicle-assembly factories operating below capacity are Ford's St. Louis facility, one of two plants that produce the Explorer mid-size sport-utility vehicle, whose sales fell 29 percent in 2005; St. Paul, Minnesota, which assembles Ranger small pickups, where sales slid 23 percent; Wixom, Michigan, where production of the Thunderbird car was discontinued last year and production of the LS sedan will cease in 2006; and Atlanta, which produces the Taurus, a sedan that is being phased out.

All of the plants had temporary shutdowns in 2005. The Wixom and St. Louis plants are re-opening today after being shut since before the Christmas holiday.

Ford is trying to adjust to plummeting sales of SUVs, which are among its most profitable vehicles. Sales of Explorer, which generated $13 billion of profits from 1990 to 1997, hit a 15-year low in November, even after the introduction of a redesigned model. The Explorer was replaced as the top-selling SUV by GM's TrailBlazer during the year.

The company may also reduce the number of corporate officers, the people familiar with the plans said. Ford now has 53 executives with the rank of vice president or above. North American sales chief Steve Lyons will leave the company, and Vice President Darryl Hazel will be reassigned, the people said.

Ford spokesman Tom Hoyt last week declined to comment on the plan's contents prior to today's announcement.

Downgrades

The company's plummeting U.S. market share prompted Moody's Investors Service to cut its rating on Ford Motor Credit Co. debt to junk on Jan. 11. Ford Credit had been the automaker's last investment-grade unit. Ford Credit was cut to Ba2 from the lowest investment grade of Baa3. Ford Motor debt was cut two levels to Ba3, lowering it further below investment grade.

The move followed a similar rating cut by Standard & Poor's on Jan. 5. S&P cut Ford's rating by two levels to BB-. S&P said it had ``increased skepticism'' that the automaker could turn around its North American operations.

Investors ``will want to determine whether the plan is sufficiently aggressive, and whether Ford has made realistic assumptions for auto demand, market share, mix, and pricing,'' Rod Lache, a Deutsche Bank equity analyst in New York, said in a report. ``Further market share loss would necessitate still further action.''

http://www.bloomberg.com/apps/news?p...c&refer=canada

[spi-ti-tout]

I only just hope this doesn't affect Ford Europe aswell otherwise we may not see some new Aston Martin's and Jag's for a long time to come ...

[Matra et Alpine]

I only just hope this doesn't affect Ford Europe aswell otherwise we may not see some new Aston Martin's and Jag's for a long time to come ...

Would be criminal if it did as Ford continue to hold the top spot for sales vehicles in the UK at 14ish% and 11ish% for retail only sales ( ie not fleet ) - 3% ahead of the rest !!!

From their January shareholders report they are PROFITABLE in every market bar one -- yep USA

[nota]

Local media ask whether the Big Three have lost touch with their home market, and comment on Ford Reflex concept at Detroit Show

It has solar powered headlights [wtf?] and interior materials made from recycled running shoes. We couldn't get close enough to check the smell ..

[Dino Scuderia]

This cut is pretty deep for Ford considering GM made about the same size cut and they are much bigger. Also this is somewhat of a cycle at Ford because Jack Nasser tried to get Ford to downsize for years but the Ford family couldn't stomach it so they fired him and took the opeations over... Mark Fields is doing the same thing only now needed cuts cannot be ignored...but we'll see who loses their job at at the top of Ford.

[kingofthering]

this is the damn UAW's fault. There job is to make sure that everyone in the auto industry gets paid for doing as little as possible and they will do anything to make that happen,causing U.S. auto industry to suffer a large blow. It was mentioned in top gear that some workers can't be fired,they can be fired but they will be sent to a worker pool where they watch t.v. everyday and get paid.

[henk4]

this is the damn UAW's fault. There job is to make sure that everyone in the auto industry gets paid for doing as little as possible and they will do anything to make that happen,causing U.S. auto industry to suffer a large blow. It was mentioned in top gear that some workers can't be fired,they can be fired but they will be sent to a worker pool where they watch t.v. everyday and get paid.

don't blame UAW, just try to imagine that US manufacturers produce cars that the consumer wants to buy

[Pando]

It's all just a side effect of the booming economy...

[henk4]

It's all just a side effect of the booming economy...

ouch...

["Clevor" Angel]

don't blame UAW, just try to imagine that US manufacturers produce cars that the consumer wants to buy

He's right though, the UAW forced the big three into an agreement that would cost them tons 20 years ago. People around here who are members of the UAW are making $80,000 a year for working on an assembly line putting doors and wheels on cars for a typical 8 hour day. Thats almost $30 an hour for a barely semi-skilled job. Plus benefits. They may actually work on only 20 or 30 cars in that 8 hours.

[henk4]

$80,000[/SIZE] a year for working on an assembly line putting doors and wheels on cars for a typical 8 hour day. Thats almost $30 an hour for a barely semi-skilled job. Plus benefits. They may actually work on only 20 or 30 cars in that 8 hours.

Are selling prices too high? Are americans therefore buying "cheaper" imports? What do foreign companies who produce in America pay for the same sort of work?

[PerfAdv]

don't blame UAW, just try to imagine that US manufacturers produce cars that the consumer wants to buy

That's an impossibility, US manufacturers can 'never' catch up the technology/quality/reliability gap, created back when planned obsolescence was the main plan for bringing customers back.

Unions are not the problem generally. UAW is not your typical union though.

[fpv_gtho]

Would be criminal if it did as Ford continue to hold the top spot for sales vehicles in the UK at 14ish% and 11ish% for retail only sales ( ie not fleet ) - 3% ahead of the rest !!!

From their January shareholders report they are PROFITABLE in every market bar one -- yep USA

I think theyre keeping PAG and Mazda out of it, they only seem to mention Ford NA, Lincoln and Mercury. Even so, the local governments been in talks with both Ford and GM to secure the local industries immediate future

[nota]

this is the damn UAW's fault. There job is to make sure that everyone in the auto industry gets paid for doing as little as possible and they will do anything to make that happen,causing U.S. auto industry to suffer a large blow. It was mentioned in top gear that some workers can't be fired,they can be fired but they will be sent to a worker pool where they watch t.v. everyday and get paid.

According to a radio 'business report' today, GM readily signed this redundancy agreement with UAW when the Gulf War was on in 1990-91 (?) to protect supply when optimism was high. Today's bad times were unforseen by GM who thought the clause was irrelevant because it would never be enacted, and an industry knock-on protocol obliged Ford to also agree

Apparently a Ford worker's regular salary is $27 p/h and health benefits etc bring this up to about $60 p/h. Including future pensions etc, a salaried line-worker is predicted to cost Ford approx $100 p/h. I presume these are USD figures

If I heard correctly, after retirement a redundant worker is entitled to about 90% of salary. Interestingly, it seems another industry protocol requires that Ford is not able to sell their redundant plants for at least a year, so their costs will rise before they (eventually) fall. The report mentioned that although Ford lost $1.4 billion last year, their still-profitable finance arm and sale of Hertz kept it in the black. But with Ford (and GM) stock rated at junk bond status, the cost of raising required capital is now ultra expensive

[Intruudir]

I fell bad for the employees but not management......WTF do they expect, Ford along with most American car makers design so many ****ing boring looking cars....it is no wonder no one buys them.

They should show some courage and take some chances on more radical designs.....