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Daily Edition: Nov. 21, 2005


Ford Set to Trim 4000 Jobs

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 Set to Trim 4000 Jobs (11/20/2005)
More job cuts presage new restructuring plan coming from Ford's front office.

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GM Fights Bankruptcy Speculation

General Motors Corp. is under intense pressure to move ahead with its new restructuring plans as talk of bankruptcy and ruin continued to intensify throughout the financial community.

The struggling automaker also got a mixed message from the preliminary surveys of November sales by J,D. Power & Associates. Midway through the month, sales of large vehicles seemed to be recovering, but GM sales still have dropped 24 percent so far in November.

GM has staked $1 billion on the new versions of its full-size SUVs, so the report on large vehicles was interpreted as a positive development for GM, according the Power report.

Meanwhile, Richard Wagoner, GM's chairman and chief executive officer, moved to reassure employees with a message in which he said bankruptcy simply wasn't an option for the giant automaker.

"I'd like to just set the record straight here and now: there is absolutely no plan, strategy or intention for GM to file for bankruptcy," Wagoner said in a letter to employees, which a GM spokesman said was posted on an internal Web site.

Wagoner said GM has a clearly defined turnaround plan and "a robust balance sheet," with $19 billion in cash and $16 billion in assets in a trust fund for retiree healthcare.

GM Fights Bankruptcy Speculation (11/20/2005)
Company may announce new restructuring this week to counter Chapter 11 talk.

Unions Say Delphi's Miller Wrong

The United Auto Workers and the other unions representing workers at the bankrupt Delphi Corp. still hope to focus more attention on the excessive compensation promised to the company's top executives as information surfaces suggesting the company is in for a sweeping overhaul.

Reports circulated last week that buyers have begun to emerge for key Delphi assets. At least two companies from India have expressed an interest in Delphi's steering-gear unit, according to press reports from South Asia.

Meanwhile, Delphi's principal unions, including the UAW and International Union of Electrical Workers, have rejected the company's latest contract proposal and refused to rule out a strike against the bankrupt auto supplier, which remains General Motors' principal source of components six years after it was spun off from the automaker.

UAW president Ron Gettelfinger described Delphi's latest proposal as "ridiculous," adding it did not include any meaningful improvements from the one presented to the union in late October. He also said he does not believe Delphi's management was willing to engage in serious collective bargaining.

Unions Say Delphi's Miller Wrong (11/20/2005)
Chief hasn't fixed management problems - so why bargain, asks union?

Flint: Your GM Questions Answered

Everywhere I go, people ask me about General Motors. Here are the questions and my answers.


 
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