January 11, 2002
Ford to close Oakville, Ontario assembly plant
Among the casualties of Ford Motor Company’s restructuring plans announced today is the Oakville Assembly plant in Ontario which assembles the F-150 pickup. The plant will likely be closed soon after the current CAW labour contract expires in September, 2002. First opened in 1965, the 3 million square feet Oakville plant has 1,303 hourly employees and 108 salaried employees. Last year, it produced 11,290 Ford F-150 trucks.
At least four other Ford plants will be closed: the Edison Assembly in New Jersey which assembles Ranger pickups; St. Louis Assembly in Missouri which makes the Explorer; Cleveland Aluminum Casting in Ohio and Vulcan Forge in Michigan which make engine parts. In addition, Ford will probably close the Avon Lake, Ohio Assembly plant where the Villager, Quest and Econoline vans are made; and severely reduce production at the Cuautitlan Assembly plant in Mexico where F-Series trucks and Mexico-only economy cars are built. Ford also wants to sell the Woodhaven Forging Plant and will downsize eleven other plants and reduce assembly line production at nine plants.
Ford wants to reduce North American plant manufacturing capacity by about one million vehicles by 2005 from 5.7 million vehicles to 4.7 million.
Worldwide voluntary and involuntary layoffs amount to about 35,000 employees: 15,000 hourly, 5,000 salaried and 1,500 agency employees in North America, and 13,500 in the rest of the world.
Ford also announced they will discontinue production of four models: The Mercury Cougar, Mercury Villager, Lincoln Continental and Ford Escort. The Villager and Escort had already been withdrawn from the Canadian market. At the same time, Ford announced that they will introduce 20 new or freshened vehicles annually between now and 2005, and spend about U.S. $20 billion over the next five years in new product programs.
These actions and those already taken are expected to improve pre-tax operating results to $7 billion annually, an improvement of $9 billion by the middle of the decade. As part of the restructuring, Ford will take an after-tax charge to fourth quarter earnings of $4.1 billion.
“Although the actions we’re outlining today are difficult, they are necessary steps to lead Ford back to a strong financial and competitive position,” said Nick Scheele, president and chief operating officer. “They will help us to address our problems, while at the same time permitting us to keep a sharp focus on delivering great products. Quality and value will be the hallmarks of our cars and trucks.”