Ford to cut deeper as gas rises and sales drop
06-15-2008, 02:55 PM
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Ford to cut deeper as gas rises and sales drop
Ford Motor Co., must further pare its work force as consumers shift to buying smaller vehicles, plant and union officials were told Friday.
Despite two years of downsizing by domestic automakers that has eliminated thousands of jobs and closed dozens of factories, with gas prices rising over $4 a gallon, overall sales are plunging.
Those who are shopping for new vehicles are switching from big SUVs and pickups to passenger cars and crossovers, forcing Ford and others to change its production mix.
It remains uncertain what that will mean for Ford’s Claycomo plant, which has two shifts building the F-150 pickup. The Claycomo plant also has two shifts producing the popular Ford Escape/Mercury Mariner crossover SUVs. The United Auto Workers Local 249 official who attended Friday’s meeting could not be reached after the meeting.
Ford did not release details of any production changes or workforce reductions Friday. Chief executive Alan Mulally said last month that more information would come in July.
Ford, which also may convert some truck plants to car production, said it would prefer to downsize through more buyouts as opposed to permanently shuttering more factories.
“We have a lot of cost-cutting elements that we can work on together,” said Ford spokeswoman Anne Marie Gattari. “We’re looking at doing those kinds of things before we do anything more drastic that no one wants to do.”
The local union has speculated on its Web site about the possibility of Ford adding a third SUV shift, which could offset the loss of 800 jobs on the second F-150 shift, should that occur.
Following Friday’s meeting, a Ford executive called the current business environment “critical.”
“The world has changed dramatically over the past few months for our business and our industry,” said Joe Hinrichs, group vice president of global manufacturing and labor affairs, in a statement. “While our plants have made good progress cutting waste and becoming more competitive, we need them to continue this work. We arrive at the best solutions when the UAW and Ford work together.”
Ford currently has two factories building the F-150. The other plant is in Dearborn, Mich., and has been running three shifts. Both truck lines at Claycomo and Dearborn have been down in recent weeks due to slow pickup sales.
Industry analysts said it was difficult to know what would happen to F-150 production at both plants and what factors Ford was weighing as the company prepared to launch a redesigned F-150 in the fall.
“It’s not the best year to be launching a new truck,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., noting that Chrysler LLC is facing the same problem with its new Dodge Ram this fall. “Both Chrysler and Ford are getting zapped by structural changes that are taking place. It’s not just the high fuel prices, but crossovers have also significantly altered the truck-buying landscape.”
F-series trucks, the top-selling industry vehicles for three decades, saw sales plunge 30 percent in May. Nevertheless, Cole said there will always be a market for big trucks, even if that market has shrunk permanently.
About 4,200 hourly Ford employees took early retirement or a cash buyout earlier this year, about one-half of what the company was seeking.
The automaker also is in the process of reducing its salaried workforce by 15 percent companywide.
TRUCK SALES DROP
Ford’s F-series pickup, including the F-150 built at the Claycomo plant here, remains the best-selling vehicle in U.S., but in May its sales dropped and it was outsold by cars.
May: 42,973
April: 44,813
March: 54,465
February: 52,548
January: 41,125
Despite two years of downsizing by domestic automakers that has eliminated thousands of jobs and closed dozens of factories, with gas prices rising over $4 a gallon, overall sales are plunging.
Those who are shopping for new vehicles are switching from big SUVs and pickups to passenger cars and crossovers, forcing Ford and others to change its production mix.
It remains uncertain what that will mean for Ford’s Claycomo plant, which has two shifts building the F-150 pickup. The Claycomo plant also has two shifts producing the popular Ford Escape/Mercury Mariner crossover SUVs. The United Auto Workers Local 249 official who attended Friday’s meeting could not be reached after the meeting.
Ford did not release details of any production changes or workforce reductions Friday. Chief executive Alan Mulally said last month that more information would come in July.
Ford, which also may convert some truck plants to car production, said it would prefer to downsize through more buyouts as opposed to permanently shuttering more factories.
“We have a lot of cost-cutting elements that we can work on together,” said Ford spokeswoman Anne Marie Gattari. “We’re looking at doing those kinds of things before we do anything more drastic that no one wants to do.”
The local union has speculated on its Web site about the possibility of Ford adding a third SUV shift, which could offset the loss of 800 jobs on the second F-150 shift, should that occur.
Following Friday’s meeting, a Ford executive called the current business environment “critical.”
“The world has changed dramatically over the past few months for our business and our industry,” said Joe Hinrichs, group vice president of global manufacturing and labor affairs, in a statement. “While our plants have made good progress cutting waste and becoming more competitive, we need them to continue this work. We arrive at the best solutions when the UAW and Ford work together.”
Ford currently has two factories building the F-150. The other plant is in Dearborn, Mich., and has been running three shifts. Both truck lines at Claycomo and Dearborn have been down in recent weeks due to slow pickup sales.
Industry analysts said it was difficult to know what would happen to F-150 production at both plants and what factors Ford was weighing as the company prepared to launch a redesigned F-150 in the fall.
“It’s not the best year to be launching a new truck,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., noting that Chrysler LLC is facing the same problem with its new Dodge Ram this fall. “Both Chrysler and Ford are getting zapped by structural changes that are taking place. It’s not just the high fuel prices, but crossovers have also significantly altered the truck-buying landscape.”
F-series trucks, the top-selling industry vehicles for three decades, saw sales plunge 30 percent in May. Nevertheless, Cole said there will always be a market for big trucks, even if that market has shrunk permanently.
About 4,200 hourly Ford employees took early retirement or a cash buyout earlier this year, about one-half of what the company was seeking.
The automaker also is in the process of reducing its salaried workforce by 15 percent companywide.
TRUCK SALES DROP
Ford’s F-series pickup, including the F-150 built at the Claycomo plant here, remains the best-selling vehicle in U.S., but in May its sales dropped and it was outsold by cars.
May: 42,973
April: 44,813
March: 54,465
February: 52,548
January: 41,125
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