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Ford To Make Deep Cuts in Worldwide Workforce

American Government Special Collections Reference Desk

Audio Topics:  Ford Motor Company

Ford To Make Deep Cuts in Worldwide Workforce

Michael Leland
Voice of America
January 11, 2002

Audio Version  391KB  Requires RealPlayer

The Ford Motor Company says it will cut 35,000 jobs worldwide during the next few years.  The cuts are part of a sweeping restructuring plan Ford officials hope will make the automaker profitable again.

In addition to the job cuts, Ford plans to close five assembly plants and eliminate four vehicles from its product line.  The restructuring plan announced Friday by company CEO William Ford highlights a sharp downturn for Ford since the year 2000, when it had a $6.7 billion profit.  Next week, the United States' second-largest automaker is expected to announce it third straight money-losing quarter.

"We realize that some of the things that must be done are painful and will impact people's lives in adverse ways.  And I can't begin to describe how sorry I am about that.  But I sincerely believe that what we are doing is necessary in order to be competitive in the short term and to do the most good for the most people in the long run," Mr. Ford said.

The job cuts include 22,000 in North America.  Plants to be closed are in the states of New Jersey, Ohio, Missouri and Michigan, as well as Ontario, Canada.  The company plans to stop making the Escort, Cougar, Villager and Lincoln Continental.  By the year 2005, Ford plans to be making about a million fewer cars a year than it does now.

William Ford has said he will take a personal financial risk in implementing the restructuring plan.  "In that regard I have asked the board to pay me no salary, bonus or long term compensation, except for options.  If the company succeeds, I will do well.  If we do not, I do not get paid," he said.

Communities where the soon-to-be shuttered plants are located say they will be hurt by the closings.  The St. Louis, Missouri, area says the loss of its Ford plant will have a $400 million effect on the local economy.  In Windsor, Ontario, the head of the Canadian Autoworkers Union, Buzz Hargrove, was critical of the plan.  "We are angry and frustrated and we do not accept the logic of this decision.  There is no economic argument for Ford to close the Oakville Truck Plant and throw a lot of people out of work, while transferring the production to the United States," he said.

The Oakville, Ontario, plant makes the Ford F-150 pickup truck and employs 1,400 people.  Ford also makes that truck at two U.S. plants, and will shift Oakville's work to those locations in a couple of years.  Mr. Hargrove calls Ford's decision nationalism by a U.S. based company.

"Since September 11th, I think the U.S. flag is flying much higher than it ever has in my lifetime.  All corporations and citizens are being asked what they can in the best interest of the United States of America," he said.

Mr. Hargrove said he does not criticize Ford for looking out for its U.S.-based operations first, but wishes the Canadian government had done more to persuade Ford to keep the Oakville plant open.

Ford's restructuring plan also calls for suspending bonuses for company managers and eliminating the company's matching contributions to employee retirement plans.

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