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Auto industry dealt another blow...Fire Or Restructure Daily

D

dan e 1980

Guest
Ford will close plants and cut jobs in latest restructuring plan

DEE-ANN DURBIN Fri Jan 20, 5:09 PM ET

DETROIT (AP) - In a survey released this week, Ford Motor Co. (NYSE:F - news) ranked last among major automakers in the use of its North American plant capacity.


It was the latest blow for the 103-year-old automaker, which closed out 2005 with its 10th straight year of market-share losses in the United States.

The company aims to reverse its fortunes with a restructuring plan that will be announced Monday.

Chairman and CEO Bill Ford has said the plan will include plant closings and job cuts, and other Ford officials have hinted at changes in Ford's product lineup.

Ford spokesman Tom Hoyt refused to comment Friday on details of the plan, including reports that it could cut more than 25,000 jobs.

Catherine Madden, an auto analyst at the consulting firm Global Insight Inc., said this week the plants most at risk for closure because of the products they make are in St. Louis; St. Paul, Minn.; Atlanta; Wixom, Mich.; St. Thomas, Ont.; and Cuatitlan, Mexico.

"Ford is in a very tough position with the amount of cash they have and the changes they need to make," Madden said.

Others are wondering if the plan will be enough to reverse the automaker's billion-dollar losses in North America. Both Standard & Poor's Ratings Service and Moody's Investors Service lowered Ford's credit rating further into junk status this month in spite of the upcoming restructuring.

"The Ford downgrade incorporates the view that the company's financial and competitive position will remain under considerable stress through 2007," Moody's said.

Ford is under pressure to make a dramatic announcement after watching Wall Street's lukewarm response to General Motors Corp.'s restructuring plan announced in November. GM's shares fell after it said it would cut 30,000 jobs and close 12 facilities.

Ford's plan "is going to have to be different," said Detroit restructuring consultant James McTevia. "I think the time for any of these domestic automobile manufacturers to procrastinate is over with."

Unlike GM, which lost $1.6 billion in the first three quarters of 2005, Ford is profitable.

Bill Ford has said Ford expects to report a profit when it releases 2005 earnings Monday. The trouble is in North America, where it lost more than $1.4 billion in the first nine months of the year.

Bill Ford said the No. 2 U.S. automaker took a bigger hit than competitors when oil prices rose, since Ford relies disproportionately on sales of sport utility vehicles and other trucks.

Ford used just 79 per cent of its North American plant capacity in the region in 2005, according to preliminary numbers released this week by Harbour Consulting Inc., a firm that measures plant productivity.

By contrast, Toyota was operating at full capacity, while DaimlerChrysler's Chrysler Group was at 93 per cent.

Ford's labour agreements with the
United Auto Workers make it difficult to cut excess capacity and jobs.

The company currently has 1,100 laid-off workers in a jobs bank, where they get full pay and benefits.

Ford also has been criticized for inconsistency in producing hit vehicles. The Ford Mustang sporty car and Fusion sedan were strong sellers last year, but minivans and the redesigned Ford Explorer SUV were flops.

As a result, the company suffered its tenth straight year of market share losses in the United States in 2005, and for the first time in 19 years, Ford lost its crown as America's best-selling brand to Chevrolet.

Ford sold around 2.9 million vehicles for a market share of 17.4 per cent, down from 18.3 per cent in 2004.

Monday's restructuring is Ford's second attempt to overhaul its North American operations in four years. Under the first plan, launched in January 2002, Ford cut 35,000 jobs and closed five plants, but North American operations failed to turn around.

Jim Padilla, Ford's chief operating officer, has said the new plan is different: "This is not just what you would call a cyclical change. This is a secular change."

Shares of Ford (NYSE:F) fell 32 cents, or 3.9 per cent, to close at $7.90 US on the
New York Stock Exchange Friday. The stock has traded in a 52-week range of $7.57 to $13.75.
 
U

unimaginative2

Guest
Re: Auto industry dealt another blow...Fire Or Restructure D

The only loss to Canada is a small casting plant in Windsor and a shift at the St. Thomas plant. Much better than expected, though still unfortunate.
 
O

Observer Walt

Guest
Re: Auto industry dealt another blow...Fire Or Restructure D

Today's announcement by Ford was bad enough (700 jobs lost in Windsor, 1,200 in St. Thomas, and no doubt hundreds of spin-off jobs). However, there is probably more to come.

Today's announcement named three assembly plants and two other plants (incl. Windsor) to be closed entirely. However they said that a total of 14 plants including 7 assembly plants would be closed by 2012. St. Thomas will likely be near the top of the list. It is quite inefficient to run a plant with only one shift. I wouldn't necessarily assume that Oakville would be out of danger either.
 
C

Chuck100

Guest
Re: Auto industry dealt another blow...Fire Or Restructure D

Fire or Restructure Daily
LOL, it's not just Fix or Repair Daily anymore.
 
D

dan e 1980

Guest
Re: Auto industry dealt another blow...Fire Or Restructure D

LOL, it's not just Fix or Repair Daily anymore.
one leads to the other.

the last one is "future operations rendered dead". that's the scary one.
 

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