September 18, 2006

Ford to cut one-third of workforce, close Canadian plants

Dearborn, Michigan – The Ford Motor Company has announced further reductions in its North American workforce and capacity, with one-third of its workforce to be reduced and several plants idled or closed, including two Canadian facilities. The Essex Engine Plant in Ontario has now been added to a list of plant closures.

The company says the move will reduce its operating costs by US$5 billion, but that full-year automotive profitability in North America is not expected before 2009; previously, the company targeted profitability in 2008.

Ford will cut its North American salaried-related workforce by about a third, or about 14,000 workers, and offer buyout packages to all Ford and Automotive Components Holdings (ACH) hourly employees in the U.S.

“These actions have painful consequences for communities and many of our loyal employees,” says Executive Chairman Bill Ford. “But rapid shifts in consumer demand that affect our product mix, and continued high prices for commodities, mean we must continue working quickly and decisively to fix our business. Mark Fields and his team deserve credit for the accelerated Way Forward strategy, which puts us on an even faster product-driven path to success.”

Some of the turnaround plans include:

  • 70 per cent of Ford, Lincoln and Mercury products by volume will be new or significantly upgraded from today through the end of 2008.

  • Ford will introduce an all-new, full-size crossover based on the Ford Fairlane concept; the seven-passenger vehicle goes on sale in 2008 and will be produced at Ford’s Oakville, Ontario plant.
  • After Lincoln Town Car assembly ends at Ford’s Wixom, Michigan plant in 2007, the model will be moved to the company’s St. Thomas, Ontario plant. St. Thomas will be reduced to one shift, as previously announced.
  • Product development will intensify through 2008 on creating new small cars and crossovers, based on the company’s global vehicle architectures, including B and C platforms not presently used in North America.
  • Ford will accelerate its previously-announced goal of reducing 25,000 to 30,000 North American manufacturing employees by the end of 2012 by four years; the reductions will now be completed by 2008.
  • The company will sell or close all ACH facilities by the end of 2008.
  • North American manufacturing capacity will be adjusted to 3.6 million units by the end of 2008, down 26 per cent versus 2005.
  • Nine facilities will be idled and cease production through 2008, including the Maumee, Ohio Stamping Plant and the Essex, Ontario Engine Plant, which were not announced in the previous closures. The Norfolk Virginia Assembly Plant will be idled a year earlier than planned, and the Norfolk and Twin Cities Assembly in Minnesota will have a shift reduction in advance of idling the facilities. In Canada, Essex Engine will cease operations in 2007, and Windsor Casting will be idled in 2007. In total, the company will cease production at 16 North American manufacturing facilities by the end of 2012, including seven assembly plants.

Canadian Auto Workers Union (CAW) president Buzz Hargrove called the Essex plant closing “a devastating blow for CAW members and the surrounding communities,” and expressed relief that the future of the St. Thomas plant will be bolstered by transfer of the Town Car production, and that the Fairlane concept vehicle CUV will be built in Oakville, Ontario alongside the Ford Edge and Lincoln MKX.

Hargrove said that union does not yet have firm figures on how many CAW members will lose their jobs as a result of the cuts in production.

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