Ford: Still More Job Cuts Needed

June 15, 2008
Hourly workers could be in for still more bad news at Ford Motor Co. The automaker's top executives are telling union leaders and plant managers that Ford has to quickly and aggressively cut costs still further if it hopes to salvage its turnaround plans. Among other things, that means it intends to offer still more buyouts to members of the United Auto Workers Union.

The news reflects the sharp downturn in Ford sales - off 15.6 percent overall in May alone - particularly on the truck side. The maker plans to trim production to reflect what marketing chief Jim Farley has called a "watershed" shift in market demand. Ford has traditionally depended on pickups and minivans for close to 60 percent of its total North American output, but going forward, it intends to shift the mix toward passenger cars.

The production shifts will take several years, as it is a challenging process to develop new passenger cars and then convert assembly plants, but a Ford spokesperson said the new buyout offers will be made "very soon." It's unclear what Ford will offer its workers, but recent buy-outs were lucrative enough to cover likely financial losses as Ford line workers sought new jobs and, in many cases, new training.

The news follows an earlier announcement at Ford this month that it must cut its overall salaried costs by 15 percent.

That development, in turn, came days after CEO Alan Mulally publicly acknowledged that Ford won't meet the goal set out in its turnaround plan to produce a profit in 2009. The former Boeing executive admitted he did not know when Ford could claw back into the black.

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