Ford to cut up to 30,000 jobs, idle 14 plants

updated 8:50 p.m. ET Jan. 23, 2006

DEARBORN, Mich. - Ford Motor Co., the nation’s second-largest automaker, said Monday that it will cut 25,000 to 30,000 jobs and close 14 facilities by 2012 as part of a restructuring designed to reverse a $1.6 billion loss last year in its North American operations.

The cuts represent 20 percent to 25 percent of Ford’s North American work force of 122,000 people. Ford has approximately 87,000 hourly workers and 35,000 salaried workers in the region.

Plants to be idled through 2008 include the St. Louis, Atlanta and Michigan’s Wixom assembly plants and Batavia Transmission in Ohio. Windsor Casting in Ontario also will be idled, as was previously announced following contract negotiations with the Canadian Auto Workers. Another two assembly plants to be idled will be determined later this year, and production at St. Thomas Assembly in Ontario will be reduced to one shift.

A total of 14 facilities, including seven assembly plants, will cease production by 2012. The names of the other facilities were not immediately disclosed.

“These cuts are a painful last resort, and I’m deeply mindful of their impact,” Chairman and Chief Executive Bill Ford said in announcing the cuts. “In the long run we will create far more stable and secure jobs. We all have to change and we all have to sacrifice, but I believe this is the path to winning.”

In addition to the facilities named Monday, analysts have also predicted that assembly plants in St. Paul, Minn., and Cuatitlan, Mexico could be closed.

Under the company’s existing contract with the United Auto Workers, workers at the idled plants will continue to get most of their pay and benefits until a new contract is negotiated next year. However, they may not make what they earn today because they won’t be eligible for overtime.

UAW President Ron Gettelfinger and Vice President Gerald Bantom called the plan “extremely disappointing.”

“The impacted hourly and salaried workers find themselves facing uncertain futures because of senior management’s failure to halt Ford’s sliding market share,” they said in a statement. “The announcement has further left a cloud hanging over the entire work force because of pending future announcements of additional facilities to be closed at some point in the future.”

The pair said Ford should be trying to gain market share, rather than aligning production capacity with shrinking demand for the company’s vehicles.

FORD REVAMP: FULL COVERAGE Ford to cut up to 30,000 jobs, idle 14 plants Analysis: Ford faces a long and hard road   CNBC video: Ford CEO details cuts Vote: Can Detroit fix its problems? Ford's earnings rose in fourth quarter Georgia plant among those to be 'idled' Union: Ford plan 'disappointing'

Earlier Monday, Ford reported earnings of $2 billion in 2005, down 42 percent from last year’s profit of $3.5 billion. It was the third straight year the automaker has reported a profit, but gains in Europe, Asia and elsewhere were offset by a loss of $1.6 billion in North American operations.

In announcing the job cuts and plant moves, Ford said Monday it would no longer provide earnings guidance beginning in 2006.

“We must be guided by our long-term goals of building our brands, satisfying customers, developing strong products, accelerating innovation, and, most importantly, producing a sustainable profit from our automotive business,” the CEO said in a statement.

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