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 ...
I think most of this was in place before the new CEO came in. My gut instinct is that Mark Fields wanted to do something more like this at the start, but was being held back by Bill Ford. IMO, Bill Ford had his heart in the right place, but wasn't necessarily making the proper decisions for the company. Fields is much more the businessman, focused on turning around the business even if it means layoffs/buyouts/etc.
I think that Mullaly (the new CEO) didn't come up with this plan. But he certainly would have given it the green light - something Bill Ford may not have been willing to do.
I think the one thing Mullaly will bring to Ford is the viewpoint of an engineer. For once, the company won't be run by MBAs without a clue how to build a car. Cars and airplanes aren't that far apart, really... the production process may be different. Their tasks may be different. But the science behind build quality, customer appeal, etc are very similar....
Bill Ford was totally absent from this morning's announcement meeting/press conference.
But they are too big an American icon to let fail (read US govt if the Dems get in).
Their SUV dependency will have to change. Big American companies cannot turn on a dime.
BUMP
In fact, in each case I bought BEFORE the market ran away and made all of them (except the Hyundais) the top sellers of all time.
There's also an S-10 pickup out there too.
My criteria for vehicle purchase is a combination of low price, ready availability of repair parts, carries my stuff and, biggest one of all, it has paint on it.
My alltime favorite has to be the 2006 Sonata ~
Doesn't surprise me one bit - they want to put a new face on the company for wall street, and Ford was probably embarrassed...
Speaking of the Fusion and the Taurus, does anyone know the current capacity of the Hermosillo plant that builds the Fusion? Last I heard (2004), the capacity was at 160,000 vehicles per year. Thats based on a two shift run. If you go to 3, you could hit 240,000.
Year to date, Fusion/Zephyr/Milan sales total 147215 (through August). That puts them at an annual pace of about 221,000. In other words, unless Hermosillo has been expanded significantly, it is likely running all-out to keep up with demand, and they'll need to open another line elsewhere to add extra capacity.
As for the Taurus outselling the Fusion, it no longer is in recent months... but still, to have fleet sales account for so much of your mid-size sedan sales is sad...
I'm not sure the gay/lesbian issue is as big as offering vehicles consumers simply don't like. Most auto manufacturers (import and domestic) have caved in to political correctness. For example, Toyota helps fund the SG gay pride parade, but does so through its local dealer organization.
Of course Toyota seems to be the choice of terrorists...Note the vehicles in the "9/11" movie
I am well aware of the principles of capitalism. What I dislike on these boards is the sheer delight some of you take when people lose their jobs. It is disturbing. Also, I read these postings. My husband works for GM-just got transferred to Janesville WI. I am sick and tired of hearing about the superiority of foreign cars and carmakers. I consider it unpatriotic. GM now offers the best warrenty in the business-100,000 miles (come with the car). They have confidence in their product obviously.
What you and others fail to understand is that the deck is stacked against American auto manufacturers. Japan is allowed to sell in this country at a lower price because they can make it up at home-American cars are kept out of Japan using dirty tricks. Japan subsidized their car manufacturers. This is strictly against the WTO rules. However, the WTO is a bastion of American haters so ths will never be addressed. All American Manufacturing is requesting is a level playing field. The people losing their jobs at Ford are doing so not because of capitalism, but because of unfair and poorly implemented trade policies.
Our government over-regulates American business and turns a blind eye to flagrant abuses of the trade laws by foreign competitors. You may think that people losing their jobs is good for stockholders-maybe for a while. However, we will lose stability in our society and will end up with national healthcare and a host of social programs. How ironic that misapplied capitalism in the form of trade policies may in the end bring about
socialism in the United States.
I owuld like to tell you something I know first hand. On 10-1-2006 a number of salaried employees at GM in Doraville Georiga will lose their jobs-no compensation of any kind except unemployment. My husband was fortunate. He was transferred and last Monday began his job in Janesville wisconsin. Perhaps, you might spare a thought and/or a prayer for these people. They are normal people with kids, mortgages just like you.
The future of the auto industry will be dealer-free. Customers will buy autos directly from the factory on line, and will pick them up at distribution centers...a kind of Walmart model of cost reduction. There will be service centers for maintenance, but no show-room floor. The coming generation is so used to buying everything on line...even homes...that it won't bother them a bit that they can't "kick the tires" first. The auto industry will either make this change to save money, or they will go under.
I can not disagree. Certainly, there have been management problems. Also, the visceral hatred of American cars is merely conservatives buying into the idea that foreign anything is superior to American products. Really, this is the same kind of snobbery and anti-Americanism you find in liberal circles. GM produces excellent cars which now have a 100,000 mile warrenty-comes with the cars, great financing options and a hidden benefit-Americans with jobs create a stable society. If we lose our manufacturing base, we will be headed for socialism. It is only a matter of time.
My husband told me last year that Ford was in deep trouble. He works for GM. You are very well informed. I hope and pray Ford survives, but they are in deep trouble-no doubt.
Well aren't you special? Of course, I am sure you know all about how bad Ford is...after all you owned one over twenty years ago. Don't forget to fly the American flag on the 4th of July...you are a patriot in all senses of the word (sarcasm).
People on this board do not understand the social cost of losing entire indusstries- electronics, garment, steel and now auto. This should not have happened. I blame the government. They did not demand fair and balanced trade. It is sad. We will all pay a heavy price for this in the end.
The $100,000 auto union employee is an urban myth. These guys/gals make no where near that. I suppose you think they should work for minimum wage. Manufacturing cars is a high teck business these days.
You bring up a good point. Many different companies are affected by the health of the car industry. If we lose American manufacturing, we would lose thousands of related jobs. I do not believe you can be a great country if you manufacure nothing. Do liberals and anti-American conservatives believe that we can serve hamburgers to each other and maintain our prosperity and our status in the world?
I absolutely agree with you. People see cheap cars. They don't see the hidden cost-social unrest and eventually socialism.
Actually, GM has turned an important corner. They are in much better shape then Ford. They stand behind the quality of their cars with the best warrenty in the industry-100,000 miles. Ford is on the ropes. My husband (works for GM) believes it will be a miracle if Ford does not go under. We are praying for Ford to succeed because it is an American company which affect thousands and thousands of people at Ford and in related industries amd ultimately the stability of American society.
"I want Ford to succeed"
Then let Ford do a warranty program like GM has just put out. I figure that will either save GM(by putting consumer confidence into American autos) or will flush them down the toilet if the product does not hold up in reality.
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