DetroitNews.com Link - More info...
'Black Monday' looms over Ford's future
Ten plants, 25,000 jobs ride on Bill Ford's 'Way Forward' strategy to be announced Monday.
Bryce G. Hoffman / The Detroit News
Ford Motor Co. workers already have a name for tomorrow.
"It's Black Monday," said Mark Mockaitis, a line worker at Ford's assembly plant in St. Paul, Minn.
Like workers from Wixom to St. Louis to Mexico, Mockaitis is anxiously awaiting Monday morning when Chairman and Chief Executive Officer Bill Ford Jr. takes the podium in Dearborn to outline a massive restructuring plan he calls the "Way Forward."
As The Detroit News first reported Dec. 7, Ford will shutter at least 10 assembly and parts plants and cut at least 25,000 blue-collar jobs in North America over the next five years, according to people familiar with the plan.
The automaker also plans to cut 4,000 salaried jobs by April 1. The layoffs begin this week. Ford also will commit to reducing its number of top executives by March 1.
While workers like Mockaitis wonder where their jobs will be tomorrow, Wall Street waits to see whether the plan goes far enough.
The company that led America to greatness and put the world on wheels now faces one of the b***est challenges in its 103-year history. And for Bill Ford, the great-grandson of Henry Ford, the stakes are not only the fate of a storied company, but the legacy of one of America's last great dynasties.
"It's the most serious crisis at Ford in modern times," said David Cole, head of the Center for Automotive Research in Ann Arbor. "I think they view this as a last shot."
The situation could hardly be more critical. Ford's market value has plunged by an astonishing $40 billion since 2001. Its North American automotive business is hemorrhaging cash and market share.
Ford posted a net profit of $1.88 billion for the first nine months of 2005, but its North American unit has lost more than $1.4 billion before taxes. The numbers are expected to look even grimmer Monday when final 2005 financial results are reported.
Meanwhile, Ford's domestic brands -- Ford, Lincoln and Mercury -- saw their combined share of the U.S. market fall 4.7 percent last year, from 18.3 percent in 2004 to 17.4 percent in 2005. A decade earlier, Ford's market share stood at nearly 25.6 percent. Every percentage point of market share represents 170,000 vehicles.
"We do have a North American auto business issue and we are committed to fixing that," Bill Ford said. "It's going to be painful for some people."
So far, Ford has responded by cutting its white-collar work force, selling its Hertz rental car business and reshuffling senior management. But one fundamental reality remains unchanged.
Ford's North American manufacturing operations still look a lot like they did when the company built one out of every four cars and trucks on the road. Ford has the factory capacity to build 4.5 million vehicles in North America, but produced just 3.3 million last year. As a result, Ford's factory utilization rate is the lowest in the industry -- just 79 percent, Harbour Consulting said last week.
'Black Monday' looms over Ford's future
Welcome to corparate America, it's pretty sickening.
