Black Monday for Ford Workers

[Ming]

'Black Monday' looms over Ford's future
Ten plants, 25,000 jobs ride on Bill Ford's 'Way Forward' strategy to be announced Monday.
Bryce G. Hoffman / The Detroit News
Sunday, January 22, 2006



Ford Motor Co. workers already have a name for tomorrow.

"It's Black Monday," said Mark Mockaitis, a line worker at Ford's assembly plant in St. Paul, Minn.

Like workers from Wixom to St. Louis to Mexico, Mockaitis is anxiously awaiting Monday morning when Chairman and Chief Executive Officer Bill Ford Jr. takes the podium in Dearborn to outline a massive restructuring plan he calls the "Way Forward."

As The Detroit News first reported Dec. 7, Ford will shutter at least 10 assembly and parts plants and cut at least 25,000 blue-collar jobs in North America over the next five years, according to people familiar with the plan.

The automaker also plans to cut 4,000 salaried jobs by April 1. The layoffs begin this week. Ford also will commit to reducing its number of top executives by March 1.

While workers like Mockaitis wonder where their jobs will be tomorrow, Wall Street waits to see whether the plan goes far enough.

The company that led America to greatness and put the world on wheels now faces one of the biggest challenges in its 103-year history. And for Bill Ford, the great-grandson of Henry Ford, the stakes are not only the fate of a storied company, but the legacy of one of America's last great dynasties.

"It's the most serious crisis at Ford in modern times," said David Cole, head of the Center for Automotive Research in Ann Arbor. "I think they view this as a last shot."

The situation could hardly be more critical. Ford's market value has plunged by an astonishing $40 billion since 2001. Its North American automotive business is hemorrhaging cash and market share.

Ford posted a net profit of $1.88 billion for the first nine months of 2005, but its North American unit has lost more than $1.4 billion before taxes. The numbers are expected to look even grimmer Monday when final 2005 financial results are reported.

Meanwhile, Ford's domestic brands -- Ford, Lincoln and Mercury -- saw their combined share of the U.S. market fall 4.7 percent last year, from 18.3 percent in 2004 to 17.4 percent in 2005. A decade earlier, Ford's market share stood at nearly 25.6 percent. Every percentage point of market share represents 170,000 vehicles.

"We do have a North American auto business issue and we are committed to fixing that," Bill Ford said. "It's going to be painful for some people."

So far, Ford has responded by cutting its white-collar work force, selling its Hertz rental car business and reshuffling senior management. But one fundamental reality remains unchanged.

Ford's North American manufacturing operations still look a lot like they did when the company built one out of every four cars and trucks on the road. Ford has the factory capacity to build 4.5 million vehicles in North America, but produced just 3.3 million last year. As a result, Ford's factory utilization rate is the lowest in the industry -- just 79 percent, Harbour Consulting said last week.

Most manufacturers would have been forced to downsize a long time ago. However, like the other domestic automakers, Ford's union contracts limited its ability to trim manufacturing operations to match its greatly reduced market share.

Even if Ford boarded up all of its American factories tomorrow, it would still have to pay the 87,000 United Auto Workers members who labor in them, while also continuing to cover health care and pension costs not only for them, but also for twice that many UAW retirees and their dependents.

The plant closings and layoffs that Ford announces Monday will either require the approval of the UAW or have to wait until the current contract expires in 2007.

Analysts have identified several factories that could get the ax Monday. Ford assembly plants in St. Louis, Atlanta and St. Paul are in jeopardy, along with one in Cuatitlan, Mexico. Ford's vastly underused plant in Wixom is also expected to be closed.

The Detroit News and other media outlets reported last week that Global Insight Inc., a leading industry analysis firm, believed the Wixom plant would be spared and Ford's plant in Atlanta would close. Since then, Ford insiders have said the Global Insight forecast was flawed.

On Saturday, Gov. Jennifer Granholm expressed hope that the Wixom plant, which employs more than 1,500 workers, will remain open. "I and my administration continue to be in regular contact with Ford officials related to any impact on Michigan facilities. The company has not provided any specific information about its plans," Granholm said.

UAW officials said last week they had not seen Ford's plan, but were bracing for bad news.

"You're talking about people, communities, hopes and dreams and aspirations, and it's very difficult and trying for our membership," said UAW President Ron Gettelfinger. "We don't like to see any jobs go away. We're always in hope that, down the road, we'll be able to reverse some of those decisions."

In total, Ford is expected to reduce its North American factory capacity by about 25 percent, or more than 1 million units.

LONG Article Continues Here: http://www.detnews.com/apps/pbcs.dll...TO01/601220408

[betron02]

poor ford, poor ford.

[Nocturn_Bird]

Originally Posted by Ming

"You're talking about people, communities, hopes and dreams and aspirations, and it's very difficult and trying for our membership," said UAW President Ron Gettelfinger. "We don't like to see any jobs go away. We're always in hope that, down the road, we'll be able to reverse some of those decisions."

But we still refuse to give up higher wadges and a full time salary for not working...But we still care.

As far as I'm concerned, the UAW gets what they deserve.

[jbartley]

gotta do what is necc. for the company to survive.

[fuhrwb]

...and with GM not far behind, do we still think that using valuable product development dollars to release a new camaro is still a good idea??

Well, the Mustang sure didn't turn Ford around.

[uujjj]

Ford's problem isn't overcapacity it is lack of sales. Maybe if they didn't abandon all their successful models after a few years . . .

[kool_zx3]

Ford's problem was lack of good product, not to mention good quality product. Same goes for GM and now their paying for it, but both are slowly getting it together.

[kenman923]

They need to do something to slash costs.

[asim]

Yeah...I saw this on the news about 5 hours ago.

[CobaltSScrazy]

its a shame... But people still want to buy foreign cars. Well, if any wixom employee drives a toyohondassanundai then they are getting what they deserve. This consumerism/capitalism/free market economy we have is fastly creating the "haves" and the "have-nots" and unfortunately for the uaw middle class, they are learning this lesson quickly...I've said it before and I'll say it again, support your country and BUY AMERICAN.

[CarShark]

Originally Posted by fuhrwb

...and with GM not far behind, do we still think that using valuable product development dollars to release a new camaro is still a good idea??

Well, the Mustang sure didn't turn Ford around.

They pushed up the profitable trucks and SUVs instead of the RWD program. I can understand that. Fine. Why aren't we getting this new Malibu that is supposed to be so beautiful until...when? 2008? 2011? I've heard a couple of different things. I know that the Camaro would be a nice thing to have, but I think that a new Malibu would be more important, or getting the W-bodies and G-bodies onto a brand-new platform.

[CarShark]

Originally Posted by CobaltSScrazy

its a shame... But people still want to buy foreign cars. Well, if any wixom employee drives a toyohondassanundai then they are getting what they deserve. This consumerism/capitalism/free market economy we have is fastly creating the "haves" and the "have-nots" and unfortunately for the uaw middle class, they are learning this lesson quickly...I've said it before and I'll say it again, support your country and BUY AMERICAN.

Yes. Why don't we support companies that have little to no idea what they are doing because we feel sorry for them.

[plane]

Buy American.
Need new Malibu.
Fortunes rest on GMT-900's and new Aura and Outlook.
Any other significant new vehicles due out in 2006?
Gotta hope for the best and that fickle N.A. consumers collectively pull their heads out and realize this is the future.
The job loss becomes a snowball effect and nobody's safe.

[shelby]

Originally Posted by CarShark

Yes. Why don't we support companies that have little to no idea what they are doing because we feel sorry for them.

That cynisism would sure come back to haunt you if your job was outsourced now, wouldn't it?

[mjd1001]

Originally Posted by plane

Buy American.
Gotta hope for the best and that fickle N.A. consumers collectively pull their heads out and realize this is the future.
The job loss becomes a snowball effect and nobody's safe.

I wish I could totally agree with this..but it is not so simple for a lot of people.

I can't tell you how many times I have talked about this with a friend or co-worker who just bought a Civic or a Corolla. A lot of people just don't see why they should buy a car at a similar price point (cobalt/cavalier) that will depreciate much more, get 7-10 miles per gallon less fuel economy, and have lower safety ratings (at least much lower in the case of the Cavalier, I hope the coblat is better).....just to 'save the job' of a UAW worker who is making 3 to 4 times as much as they are making.

I'm not saying it's right or it's wrong. I'm just saying I have been on both sides of that conversation...and when you are talking to someone who is working full time to make $25,000 a year and has 2 kids.....tell them to buy the American product at your own risk.