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Ford to cut 20,000 jobs, close plants Report: Automaker to unveil restructuring moves on Friday DETROIT, Jan. 7 — Ford Motor Company, according to a published report in the Financial Times Monday, will approve a restructuring plan later this week that will result in up to 20,000 job cuts and some plant closures.

THE THREAT of major cutbacks at Ford have put a damper on the usual festive atmosphere at the North American International Auto Show, which began Sunday.

The Financial Times report said a special board meeting has been convened, and the cutbacks will be announced Friday.

About 8,000 of the job cuts will reportedly affect white collar workers, while up to 12,000 hourly workers may be asked to take early retirement or voluntary severance packages, the publication reported.

The restructuring comes as Ford, struggling with its worst financial crisis in nearly a decade, has said it expects to post a fourth-quarter operating loss, stemming in part from a jump in bad loans and customer credit problems, of about $900 million. The automaker, which ousted its hard-knuckled former chief executive, Jacques Nasser, in October, posted a combined total of $1.4 billion in losses in the second and third quarters of 2001 and axed 5,000 salaried jobs through voluntary early retirements last summer, followed by the lay-off of more than 600 mostly hourly workers in December.

Ford Motor Co.’s European division, however, appears on track to make a profit this year and will likely break even for 2001, the unit’s head said on Monday.

“I would be very surprised if we didn’t make our commitment” for 2001, Ford Europe chief David Thursfield told Reuters in an interview. He said the unit would continue its turnaround plan announced in 1999 and expected no drastic changes.

The threat of cutbacks has affected the buzz at the auto industry’s premier annual auto show.

“There’s no doubt about it,” said Ford spokesman Jim Bright. “The coming news does unfortunately cast a shadow over anything here.”

The focus is usually on sheet metal and a blitz of new models of cars and trucks at the Detroit show.

But The Financial Times’ report on Monday and a banner headline, splashed across the front page of Sunday’s editions of The Detroit News and Free Press, set the stage for this year’s more somber gathering.

“Angst Crashes Auto Party,” said the headline, referring to an imminent restructuring announcement from Ford and the struggles of all three Detroit automakers for profitability in a weakened U.S. economy.

U.S. auto sales last year reached the near-record highs set in 2000, especially after the Sept. 11 attacks when Detroit’s Big Three introduced interest-free loans and other incentives to shore up consumer sentiment and demand for new vehicles after the suicide plane attacks in New York and Washington.

But deep discounts, to “move the metal” in industry jargon, have eroded profit margins for U.S. automakers. And they face an ever more guarded outlook as their Asian and European rivals, many of whom enjoy reputations for better product quality and design, gain momentum in their relentless assault on the U.S. market. Highlighting the intensifying competition for U.S. automakers, a panel of automotive journalists named Nissan Motor Co.’s new Altima sedan the “North American Car of the Year” at the opening of the show in Detroit’s cavernous Cobo Hall convention center on Sunday. It was the first time a Japanese car had won the award and came as the Accord, from Japan’s Honda Motor Co., broke the long reign of Toyota Motor Corp.’s Camry as America’s best-selling car.

In another sign of the times, and a grim reminder of the attacks of Sept. 11, sheriff’s deputies patrolled the corridors around the auto show with bomb-sniffing dogs.

There were other awards, toasts and spin from industry executives about new “concepts,” or vehicle prototypes, amid the glitz and glitter that the auto show brings like a pageant ever year to a city almost synonymous with urban decay.

Tapping into the post-Sept. 11 wave of American nostalgia by unveiling a modern version of one of its most illustrious vehicles of the past, General Motors Corp rolled out a retro-styled Chevrolet Bel Air concept convertible. And the Chrysler side of DaimlerChrysler AG introduced the Pacifica, a combination station wagon-sport utility vehicle that the company believes could be as successful as its PT Cruiser or the original minivan. DOWNHILL RACERS

Only a year ago, Ford was widely regarded as the best-managed of Detroit’s Big Three. But its recent troubles include the Firestone tire crisis, declining revenues and a string of high-profile quality problems.

Detroit has been awash with rumors that Ford will include the closing of some of its 21 North American assembly plants, as part of an effort to bring its costs into line with a diminished market share.

There is a moratorium on plant closings in Ford’s contract with the powerful United Auto Workers union, which could stage a crippling strike if factories were shut down without its consent. But UAW sources said Ford’s chairman and new chief executive, family scion Bill Ford, won a virtual assurance of labor peace at a meeting with union leaders in Cincinnati late last year.

However, this time a year ago, the focus of the show was on DaimlerChrysler as it prepared to announce a turnaround plan for its loss-making Chrysler unit.

Underscoring the slow pace of turnarounds when it comes to the giants of the automotive industry, Chrysler President Dieter Zetsche told reporters on Sunday that the company will post a 2001 loss at the smaller end of its forecasts, of between $2 billion and $2.5 billion.

But Zetsche also warned that U.S. market conditions — including an expected drop in sales and continuing high levels of expensive customer incentives — would not allow him to guarantee that the automaker would reach its break-even goal this year.

-- Anonymous, January 07, 2002