Road to NA profitability includes job cuts and capacity reductions
Ford cuts jobs, capacityDEARBORN, Mich. -- Maybe the way forward begins by looking backward. Four years after trumpeting their plan for a revitalization, Ford now has a Way Forward, and the only thing the two plans have in common is the elimination of jobs, jobs, and more jobs – and a promise to do things better in the future.
The plan is designed to make Ford in North America profitable by 2008, via reducing cost and capacity, and relying on globally shared vehicle architectures for new vehicles they hope will appeal to the North American audience. Detailed by Mark Fields, Ford’s new president of the Americas, the plan was a sober review of past mistakes, such as an admission by Ford of their focus on truck and SUV sales while car buyers were looking at cars and crossovers, and an outline of steps necessary to regain its competitiveness. Competing will take the loss of up to 30,000 salary and hourly jobs by 2012, and the closure of 14 plants in North America – at least seven of which are assembly plants. Plants to close include St. Louis, where the Ford Explorer and Mercury Mountaineer are built, Wixom, where the Lincoln Town Car is built, and Atlanta, where the Ford Taurus is built. Up to 4,000 salary jobs will be lost by the end of the first quarter, 2006, and Fields said that Ford needs cut $6 billion in material costs by 2010. According to multiple reports, the job cuts total about 28 percent of the Ford North American work force.
Total capacity reduction will total 1.2 million vehicles, or 26 percent, by 2008. In addition to cuts, the plan also details the way Ford will improve the quality of its vehicles and heighten their consumer appeal, with measures such as linking compensation to quality improvements and by decreasing the time in which Ford refreshes a vehicle, from 4.4 years to a little over 3 years. Despite the reductions, Ford says they plan to be aggressive in building new models, using their global architectures to deliver more crossover, hybrid and small vehicles. Ford’s product plans include a new style for their beleaguered minivans, which will reportedly make the Freestar look like a Freestyle crossover, and a Freestyle look like a Mercury – which is the only place you’ll find it once the new Ford Edge Crossover debuts later this year. The Freestyle will likely find life as a Mercury even harder than as a Ford, however: while a very functional and easy- to-drive crossover, critics panned its plain appearance and the Freestyle never caught on.
Fields said that he is committed to keeping all three Ford brands, saying that Lincoln and Mercury have a place in the market, and that there would be little benefit to killing either struggling nameplate.