Spy Shots: '07 Lincoln Aviator by Brenda Priddy (11/20/2005)
The Edge gets a luxurious twin.

Ford Motor Co. took the first step in its next restructuring by confirming it plans to trim up to 4000 white-collar jobs in North America by the end of March.

Mark Fields, Ford president of the Americas, disclosed the plan in an e-mail distributed to Ford employees. The cuts will include full-time and contract positions. Some of the cuts will come through attrition but others will require layoffs, according to Fields, who is expected to lay out the full scope of the company's restructuring plan in January.

The plan is expected to include the closure of assembly plants and the reduction of other operations. The plan was originally due in October but William Clay Ford Jr., Ford's chairman and chief executive officer, decided to defer implementation to give Fields and his chief deputy Anne Stevens a chance to review the plans and put their own stamp on it.

Ron Gettelfinger, president of the United Auto Workers, confirmed last week that the union has opened discussions with Ford about revisions to the healthcare benefits that are part of the UAW's contract with the automaker. Gettelfinger didn't offer any timetable for completing the healthcare agreement with Ford, but the union has already agreed to a package of concessions to General Motors that is expected to save that automaker as much as $3 billion. Ford's problems with healthcare costs are not as severe as GM's because the company has fewer retirees, but they are still substantial.

Ford has already eliminated almost 3000 salaried positions in North America this year as part of its ongoing cost-cutting effort, which intensified last spring when it became apparent the company's critical North American operations were not going to reach their financial goals. Ford began the year with roughly 35,000 salaried employees.

The earlier cutbacks had included first involuntary layoff of Ford salaried personnel since the 1970s, and have since led to substantial reductions in the size of several employee groups, including the public relations unit and the sales organization, which is being streamlined. Part of the next round of cuts will come from the company's manufacturing operations, which are certain to be downsized when the full plan is revealed in January.

The job cuts are being driven by steep losses at the company's North American automotive business, which has lost $1.2 billion through the first three quarters of 2005. The rest of the company is profitable but still reported a third-quarter loss of $284 million due to the poor performance in North America.

Like General Motors, Ford's profitability has been undermined by the high cost of the incentives used to promote sales in the face of stiff competition and a decline in market share that has left it with too much assembly capacity. A steep drop in the sales of pickup trucks and sport-utility vehicles also has hurt the company's profitability.

The announcement of new cutbacks in the white-collar ranks is certain to increase concerns about whether Ford can hang on to enough talented managers and professionals to meet future challenges. Several executives, including Phil Martens, the head of product development, and Mary Anne Wright, head of Ford hybrid-vehicle program, have left the company over the past couple of months.