Black Monday for Ford USA.

[MYVYSS]

FORD Motor workers face bleak prospects with the car giant set to announce huge job cuts and plant closures in the US today in a bid to counter losing market share to Asian rivals.

News reports said that up to 29,000 job cuts and 10 plant closures would be announced by company chairman and chief executive Bill Ford.
"We're going to do what we have to do. It's just very, very sad," Mr Ford told Time magazine ahead of the announcement.

"My goal is to fight Toyota and everyone else and come out on top," he said.

Detroit's daily newspaper, the Detroit News, quoted people familiar to Ford's "Way Forward" plan saying that 25,000 factory workers would lose their jobs over five years and 4000 clerical and managerial jobs would be cut by April.

It said 10 plants could be closed under the plan, which follows a similar huge cost-cutting by General Motors, the world's biggest car maker.


Including hourly and salaried job cuts, Ford will likely commit today to reducing its 120,000-member North American work force by about a quarter, according to people familiar with the plan quoted in the newspaper.
Media reports said unions and workers were already calling it "Black Monday."

Mr Ford told Time there would be greater emphasis on hybrid petrol-electric engines and other environment innovations and bolder designs.

"The old way of doing things doesn't work," Mr Ford told the magazine. "Is (this) risky? Of course it's risky but I tell you what: Going the way we were going is the highest risk of all."

Analysts said investors were more worried about whether Ford will get its auto operations back to profitability.

"The near-term savings are not going to be as much as it needs to be," Brian Ropp, a car analyst with T. Rowe Price brokerage said.

"What it does is keep them from producing cars they don't need and they won't have to discount the cars as much."

The savings from job cuts are limited by the car maker's contract with its main union.

Hourly employees who do not take early retirement packages enter the jobs bank retraining program in which they collect full pay and benefits while waiting for a spot to open up on the assembly line.

Cutting production levels may not help Ford's declining market share. In the past 10 years, Ford has seen its share of the US market drop from 26.4 to 17.4 per cent, the lowest level since the 1920s.

Ford boosted overall sales in the 1990s with four-wheel drives, but its market share in that profitable segment waned as Japanese rivals introduced smaller, car-based crossover four-wheel drives.

The real trouble hit in 2005 when energy prices jumped and Ford's light truck sales -- which include four-wheel drives -- fell 8.7 per cent.

Ford's North American unit posted a $US1.4 billion ($1.87 billion) loss in the first nine months of 2005 and Standards and Poor's has warned the unit's pre-tax losses could reach $US2 billion for the year.

While the company as a whole is expected to announce a 2005 profit, that is largely due to the money it earned from its loan operations at Ford Credit, said Burnham Securities analyst David Healey.

[phoon]

Its not just a black day for Ford USA, its a black day for Ford worldwide, new projects will get put on hold or stopped, money for future models will be pulled back and cost cutting will go on everywhere, including here.

[XW_GS]

quik sell your Fords and buy a Holden.....................NOT!

[max^power]

aren't all car makers feeling the pinch?

[64compact]

I think Ford wants to look at what makes it a great car maker and what the consumer needs and marry the 2. In the beginning the customer wants a stylish car that goes well and hasn't the problems. Have a look at a 10,000 service sheet for a Toyota and there is flat out being 2 warranty items on the sheet. have a look at a Holden or a Ford sheet and it is nealy allways full of warranty complaints. this has got to eat in to sales over a couple of generations of Models and people will be buying Toyotas. Ford & Holden need to get away from the "That'ill DO " attitude of building Cars if they want to trade through the next couple of Decades. What Ford did with the BA was great but it is taking a long time to Bring Back the customers it lost. and if they keep leting the Quality Control Slip like it has been doing in the last Year before the customer walks back in to the sales Door than Toyota will Maintain the resale to that Customer.

[RSgerry]

for years toyota have been building cars that are well put together and reliable. they may be bland, but, people dont have any problems with them. i wonder if a big part of the problem for ford is the oil price. i personally dont like SUV / 4WD vehiles, and i wonder if the market has taken a dive in this sector as others want something more practical and economical. there is no reason why ford cant bounce back from this, but it will require building quality cars and listening to the customers a bit better. SBS had a small feature on this story tonight and they showed a row of new small fords that looked like korean cars from the 1990's...desperately ugly. yet you look at the focus (old and new shape) and you see what ford are capable of doing with a small car.

[outback_ute]

I saw the bit on SBS news too, one thing they said is that Ford & GM have to pay addidtional costs (v. high) because of their deal with the unions than what other manufacturers do for their US factory workers. The unions might have helped kill the goose that laid the golden egg I think.

[XW_GS]

As you said Unfortunately the US are buying more of the Toyotas which are better finished off cars, and Ford at the moment are suffering cause of poorer quality,

share prices have gone up cause of the cuts tho...

[csv8]

Scary fact, Toyota Japan could buy GM from their petty cash. !!!!!!!!!!!!!!!!!!

[UNR8D]

toyota is the richest car maker globaly, many reasons for this but they have almost 100billion US cash reserves... may make some bland cars but they know how to market and sell what people want...

[superpursuit83]

I think they need a few Aussie XR's, FPV 8's+6's and some 6T's to get the sales up

[EDXR6T]

^^

i second that:P

and yer GM ante looking to healthy ether :thebirds:

[XRQTOR]

Originally Posted by csv8

Scary fact, Toyota Japan could buy GM from their petty cash. !!!!!!!!!!!!!!!!!!

Highly doubt it mate.

[XRQTOR]

Originally Posted by superpursuit83

I think they need a few Aussie XR's, FPV 8's+6's and some 6T's to get the sales up

Yep they love the Ba falcon range, imagine how many they would sell. The only v8 4 door car in the states is that new 3ooC which apparently isn't much cop.

It'd be good if ford au could make the BA/BF range left hook and sell some overseas.

[UNR8D]

Originally Posted by XRQTOR

Highly doubt it mate.

i think u might find that it wouldnt be far off the mark, as i said they are the wealthist car maker in the world... 100billion US cashreserves + other equities... wouldnt suprise me if they would just for the funny of it.

[vztrt]

Originally Posted by UNR8D

i think u might find that it wouldnt be far off the mark, as i said they are the wealthist car maker in the world... 100billion US cashreserves + other equities... wouldnt suprise me if they would just for the funny of it.

Toyota can buy Ford and GM with ease. I guess the whitegoods on wheels sell well.

[tbearz]

Originally Posted by superpursuit83

I think they need a few Aussie XR's, FPV 8's+6's and some 6T's to get the sales up

right uh huh, gees why didnt they think of that before _
the reason behind fords situation, apart from making crap cars no the great "insert many names" they made back in 1970's means sfa now 40 years later,
the company is a bloated pox and needs a swift kick up the backside so all the Sh1t falls out. The company is so out of touch its not funny, plus the fact the health insurance policies (well henry fords promise of treating workers well) is coming back to bite where it hurts.

Yes people are loosing their jobs but if people dont realise that this is the effect of phenomenon pushed so hard, globalisation, except for the people who pushed it so hard, the dopey asses didnt realise it would lead to their demise

Oh and everyone who is blaming price of oil, wake up and smell the crap py: yes it has slight reasoning but people want innovation thats why europe & japan are sweeping the board (japanese & germans) => i am not a racist but smells of ww2 to me..........

Ah well....might be a few cheap gm's & fords soon looks like they are heading the way of the rover boys :

[Bossxr8]

(japanese & germans) => i am not a racist but smells of ww2 to me..........

[/QUOTE]
Maybe its payback for being smashed in WW2. We can't beat them on the battlefield so we'll just destroy their economy bit by bit. :hihi:

[LS2 KLR]

I've been following this for a couple of months, and my understanding is it's due to paying sacked, retentioned or injured workers a salary until they're 55. GM is also in this up to their head and it costs them about 6 billion a year. It's to do with something the unions brought in during world war 2. To entice workers into the manufacturing industry the car companies offered generous pensions, healthcare and disability benefits. America not having a national healthcare system, they should learn from the Aussies. It is also due to dodgy brands and suspect quality, which the japanese companies don't exactly have a problem with. Well that's my two cents.

[vztrt]

I just saw on the business/finance report that GM had a loss of 15.4 billion (but they had a profit of 4 billion in 04).

I guess Ford's proposed 2 billion doller loss dosen't seem as bad. But still is of course.

I just hope there is a wake up call at both GM and Ford to get their act together as I dont my next car to be FWD or AWD.

[Dodge]

asia has alot to offer , something which ford and chev have failed to deliver for a while.
Do u see any factory built RHD mustangs here or in the UK ? no

[The G6ET Spot]

I guess they are just downsizing.Well thats what GM called it when they announce they were shedding 25,000 jobs.Go figure.

[Bossxr8]

Originally Posted by vztrt

I just saw on the business/finance report that GM had a loss of 15.4 billion (but they had a profit of 4 billion in 04).

I guess Ford's proposed 2 billion doller loss dosen't seem as bad. But still is of course.

I just hope there is a wake up call at both GM and Ford to get their act together as I dont my next car to be FWD or AWD.

Oddly enough when you factor in the profit of Ford credit the company as a whole made a profit, so things aren't as bad as GM, and most Ford companies worldwide made profit, its only North America dragging the rest down, and Jaguar.

[russellw]

This is a long term problem that is coming home to roost for both of the so-called Big 2 - Chrysler having reinvented itself some time ago and proven to be a nice target for Daimler albeit not without some pain.

The biggest problem they face is a 3 decade old one and that is their build quality against the Japanese onslaught. Let's start with a history lesson for the younger set.

Back in the latter part of the 60's when the first few imported cars arrived in the US from Japan they had much the same impact on the market as they had here which was to force the local manufacturers to lift the standard equipment levels in their vehicles to match the features being offered by Toyota and Nissan.
The major difference in the US market was the patriotic nature of their purchasing decisions and it was that patriotism that eventually led to the Japanese manufacturers building plants on American soil along with some not inconsequential fighting by the UAW.
This in turn created the next problem for the big three (as it was then) because many of their plants were already 30 and 40 years old while the Japanese and others were building state of the art new factories that not only built to far better tolerances but also had lower production costs. Years of waste and inefficiency had left the US giants with not a lot of actual capital to refurbish old plants and when the oil crisis hit in the late 70's they watched their market shares plummet at the same rate the Japanese manufacturers flourished because they were building fuel inefficient dinosaurs while the Japanese supplied the exact opposite.
This saw the first round of massive layoffs and negotiated agreements with the UAW but didn't see the improvements in manufacturing that were really needed.

Fast forward to the present day. In the Ford world alone the vast majority of plants are now over 50 years old - sure they have had refurbishments along the way but the basic infrastructure is simply not capable of building a well constructed motor vehicle to the standards expected today. A lot of this has to do with politics - many of these plants are big employers in their regions and attempts to close them have met with strong resistance from government, unions and the populace as a whole.

The Chicago assembly plant dates to 1924 but it did have a US$2bn makeover in the late 60's; Kansas assembly to 1951; Louisville to 1953; Michigan to 1957; Norfolk to 1925; Oakville to 1953; Wixom to 1957; Wayne to 1952; St Paul to 1925 and St Louis to 1948. Indeed only the St Thomas (1967); Kentucky (1969), Ohio (1974) and Dearborn (2004) plants post date the Japanese invasion.

When the last grand fix it up plan was announced it was estimated by industry analysts that Ford required an investment of US$160bn to bring their manufacturing capacity up to date. I'd hate to think what that figure is today.

These are all dedicated vehicle plants - that is they are set up to produce one or two vehicles rather than the flexible production capability offered by the modern Toyota plants like Texas (2005) and Tennessee (2006) which can change the vehicle being produced in less than half a day.

Despite this, the plan is a step in the right direction if it can be executed effectively. It does include the construction of at least one new facility but that probably falls short of what is required in the longer term. It's a ИИИИИ of a situation as the lack of profits equate to a lack of capital with which to fix the fundamental problem.

Glad I don't have to make those decisions.

Russ

[vztrt]

Originally Posted by Bossxr8

Oddly enough when you factor in the profit of Ford credit the company as a whole made a profit, so things aren't as bad as GM, and most Ford companies worldwide made profit, its only North America dragging the rest down, and Jaguar.

I know Jag keeps getting bailed out but Ford use their R&D in their other cars (Wishbone suspension was from JAG). So I believe that Ford don't really expect them to make a profit. But I believe that they would want Jag to break even.

Originally Posted by russellw

Years of waste and inefficiency had left the US giants with not a lot of actual capital to refurbish old plants and when the oil crisis hit in the late 70's they watched their market shares plummet at the same rate the Japanese manufacturers flourished because they were building fuel inefficient dinosaurs while the Japanese supplied the exact opposite.

Whats funny is that all the efficient practices that were taught to the Japanese were done by an American. He tried teaching the Americans but because the country had masses of cheap resources efficient practices was considered a waste of time. Unlike WW2 ravaged Japan.
Came back to bite the Yanks in the ar_se.

[buickman]

Fact is the Americans cannot build a decent small car & as others have said they didn't learn their lessons from the OPEC oil embargo of 1974 With Toyota building a plant in Ohio that would save transport costs being central to most of the large cities. Plus bring in the ETA of 6 weeks stock holding to save logist costs.They are building cars that seem to sell well & areheading to be the No1 car manufacture.I even think Google is worth more than G.M or Ford with nowhere near the running costs

[vztrt]

Originally Posted by vztrt

I guess Ford's proposed 2 billion doller loss dosen't seem as bad. But still is of course.

I'll retract this. Ford announced that they actually made a profit of 2 billion dollers (third profit year in a row) last year and only the North American region made a large loss for ford.

[AnthonyQLD]

Originally Posted by superpursuit83

I think they need a few Aussie XR's, FPV 8's+6's and some 6T's to get the sales up

Yep I reckon the would sell like hot cakes :nutsycuck