Ford retooling program may trigger big job cuts

Associated Press

DETROIT — Ford Motor Co.’s massive restructuring program to be announced Friday could include thousands of job cuts, analysts who follow the nation’s second biggest carmaker say.

Ford officials said Monday there would be some reductions in the work force but wouldn’t say how many cuts there would be. They said the plan is aimed at increasing manufacturing flexibility while reducing capacity and renewing focus on developing high quality products.

Ford chief operating officer Nick Scheele called analyst estimates of job cuts "guesses."

"We’re not going to respond to what external people say you must do or not do," he said Monday at the North American International Auto Show.

On Sunday, chairman and CEO William Clay Ford Jr. told reporters at the show that Ford "can’t cost-cut our way out" of its slump. "The turnaround will be driven by great products," he said.

Some analysts have predicted that up to 20,000 jobs will be eliminated to help the company become profitable again.

Scheele said Monday the restructuring plan would be global and include operations in Japan.

However, both Scheele and North American operations chief Jim Padilla said there would be some head count reductions that could be accomplished largely through attrition.

"We have the capabilities to move people, there’s the possibility of buyouts," said Padilla.

Ford plans to release its fourth-quarter financial report next week.

The automaker said last month that it expected to report a loss of 50 cents per share for the last three months of 2001. Analysts had been expecting a loss of 14 cents a share for the quarter and some said the company’s loan policies led to trouble.

Last week Ford reported its U.S. vehicles sales dropped 6 percent in 2001 from 2000.

Ford, like the rest of the industry, has excess manufacturing capacity, Padilla said.

But that doesn’t mean the No. 2 automaker will cut product programs to save money in the short-term, Scheele said in an interview Sunday.

Scheele said the company’s contract with the United Auto Workers union forbids wholesale plant closings, but said the company would be working with the UAW on the local level as it attempts to reduce manufacturing capacity.

Automated processes might be programmed to do several jobs instead of just one and plants could be made adaptable to build more than one type of product, or be retooled quickly to build more popular products.

"You have to right-size for capacity and build what you sell," Scheele said.

Right-sizing is generally a code word for cutbacks.

David Littmann, chief economist for Comerica Bank, estimates Ford will have to cut between 7 percent and 12 percent of the work force.

"In Ford’s case … in terms of actual, hard-nosed job cuts, I’m talking 12,700 to 14,000," Littmann said.