Smaller, Nimbler Organization
Achieving a lean fixed-cost structure and significantly improving Ford’s North American assembly capacity utilization are critical components of the Way Forward plan.
“We’re now well past the point in which one or two hit products can correct the overcapacity we have or justify the staffing levels we maintain – even with the significant actions we’ve taken during the past couple of years,” Stevens said. “Sadly, this isn’t just a Ford issue. It’s an issue for our domestic competitors, as well.
“As hard and painful as it is to idle plants and reduce our work force, we know these sacrifices are critical to set the stage for a stronger future,” she added.
Ford is taking the following new actions to align its capacity with expected demand and to reduce fixed costs:
- 14 manufacturing facilities will be idled and cease production by 2012, including a total of seven vehicle assembly plants.
- Assembly capacity will be reduced by 1.2 million units or 26 percent by the /files/storyimages/of 2008.
- A new low-cost manufacturing site is planned for the future.
Ford will idle the following facilities through 2008:
- St. Louis Assembly
- Atlanta Assembly
- Wixom Assembly
- Batavia Transmission
- Windsor Casting (announced following CAW contract negotiations in 2005)
- Two additional assembly plants, which will be determined later this year
In addition, production at St. Thomas Assembly will be reduced to one shift. Facilities operated by Automotive Components Holding LLC are not included in the new announcement.
All of these actions will reduce total North American employment by 25,000-30,000 people in the 2006-2012 time period. This is in addition to the previously announced reduction of the equivalent of 4,000 salaried positions in the first quarter of 2006 – or 10 percent of salary-related costs – and a reduction in t he company’s officer ranks by 12 percent by the /files/storyimages/of the first quarter.
Ford has briefed the leadership of the UAW and CAW about these plans.
