[A-List] PAINFUL

["Charles Brown" <cbrown@xxxxxxxxxxxxxxxxx>]

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ry=AUTO01&ArtNo=601240392&Ref=ARQ=100&MaxW=500>



	A worker leaves Ford's Wixom assembly plant at lunchtime Monday.
Many of the plant's 1,567 workers hope they'll be able to transfer to
another Ford plant once the automaker's largest North American factory
closes.

PAINFUL

	David Coates / The Detroit News


Ford slashes 28% of its work force in sweeping bid to save itself

Bill Vlasic and Bryce G. Hoffman / The Detroit News



Related links

 <http://www.detnews.com/graphics/arrow-red.gif> Ford to shut Wixom and 13
other plants
<http://edit.detnews.gannettonline.com/apps/pbcs.dll/article?AID=/20060123/A
UTO01/601230407/1148>
 <http://www.detnews.com/graphics/arrow-red.gif> Ford statement on
restructuring
<http://www.detnews.com/apps/pbcs.dll/article?AID=/20060123/AUTO01/601230419
>
 <http://www.detnews.com/graphics/arrow-red.gif> UAW statement on Ford's
restructuring plan
<http://www.detnews.com/apps/pbcs.dll/article?AID=/20060123/AUTO01/601230418
>
 <http://www.detnews.com/graphics/arrow-red.gif> Track Wall Street reaction
<http://detnews.stockgroup.com/sn_overview.asp?lang=&uniqueid=&ticker=f>
 <http://www.detnews.com/graphics/arrow-red.gif> Ford declares resurgence of
Ford Motor Company
<http://media.ford.com/newsroom/release_display.cfm?release=22465> Text of
remarks by Bill Ford, Chairman and CEO, Ford Motor Company
<http://www.detnews.com/graphics/arrow-red.gif> Fields: Ford Fights back
<http://media.ford.com/newsroom/release_display.cfm?release=22464>
Transcript of remarks delivered by Mark Fields, Ford Motor Company Executive
Vice President and President of The Americas Photo gallery
<http://hosted.ap.org/dynamic/galleries/367-3.html?SITE=MIDTN&SECTION=HOME&T
EMPLATE=DEFAULT>

V
Charles V. Tines / The Detroit News

"We will be making painful sacrifices to protect Ford's heritage and secure
our future," says Ford Motor Co. Chairman and CEO Bill Ford Jr., center. He
discusses the cuts with, from left, Mark Schulz, group vice president of
Asia Pacific; Mark Fields, president of Ford's the Americas Division; Jim
Padilla, president and chief operating officer; and Don Leclair, chief
financial officer of Ford Motor Co. in America. go
<http://www.detnews.com/pix/fixtures/arrow-red.gif> See full image
<javascript:NewWindow(600,400,'/apps/pbcs.dll/misc?url=/misc/zoom.pbs&Site=C
3&Date=20060124&Category=AUTO01&ArtNo=601240392&Ref=H3');>



David Coates / The Detroit News

Michigan House Speaker Craig DeRoche, R-Novi, left, and Moe Leon, owner of
Leon's Food and Spirits, talk on Monday at the restaurant as disheartened
employees from the plant trickled in. go
<http://www.detnews.com/pix/fixtures/arrow-red.gif>


John T. Greilick / The Detroit News

The 49-year-old Wixom plant will close next year. But UAW President Ron
Gettelfinger predicts a showdown at the Big Three-UAW national contract
talks in 2007 over the elimination of jobs and factories. go
<http://www.detnews.com/pix/fixtures/arrow-red.gif> See full image
<javascript:NewWindow(600,400,'/apps/pbcs.dll/misc?url=/misc/zoom.pbs&Site=C
3&Date=20060124&Category=AUTO01&ArtNo=601240392&Ref=V6');>





DEARBORN -- Ford Motor Co. is staking its future on the success of a
gut-wrenching restructuring of its North American operations that will
dramatically downsize the No. 2 U.S. automaker.

Mired in one of the deepest crises in its 102-year history, Ford on Monday
unveiled its long-awaited "way forward" plan to slash up to 30,000
manufacturing jobs, cut 4,000 salaried employees and shutter 14 factories --
including its assembly plant in Wixom.

"These cuts are a painful last resort, and I'm deeply mindful of their
impact," Chairman and CEO Bill Ford said. "They're going to affect many
lives, many families, and many communities."

The restructuring plan is Ford's most determined effort yet to stem deep
losses in North America and beat back surging foreign automakers. Even so,
some investors and analysts said Ford left key questions unanswered Monday
and they remain skeptical that the automaker is moving quickly and
aggressively enough.

Ford's announcement was another staggering blow to the traditional American
auto industry, coming on the heels of the bankruptcy of auto-parts giant
Delphi Corp. and moves by General Motors Corp. to cut 30,000 of its own
hourly workers and close 10 plants.

Since 1979, Detroit's automakers have cut more than 600,000 jobs --
including about 80,000 since 2001 -- in a desperate bid to overcome huge
legacy costs and troubled brands.

The central aspects of Ford's "way forward" plan were first reported Dec. 7
by The Detroit News.

Bill Ford said the plan represents nothing less than a cultural revolution
and a declaration of war -- against not only Ford's competitors, but also
its own change-resistant bureaucracy.

"Today, we declare the resurgence of Ford Motor Co.," Bill Ford said. "Here
is what we will not stand for: incremental change, avoiding risk, thinking
short-term, blocking innovation, tying our people's hands, defending
procedures that don't make sense, and selling what we have instead of what
the customer wants. In short, we will not stand for business as usual."

It was a message that scores of Ford employees invited to hear the
announcement at a Ford design center in Dearborn greeted with enthusiastic
applause. Ford's announcement, part of a historic retrenchment of the U.S.
auto industry in the past year, drew throngs of local, national and
international members of the media.

With its U.S. market share in a 10-year freefall, dropping to a low of 17.4
percent last year, Ford said Monday that its North American auto operations
posted a pre-tax loss of $1.6 billion last year.

Ford committed to returning the business to profitability no later than
2008. "That's not a prediction. That's a promise," said Mark Fields,
president of Ford's America's division, who oversaw the restructuring plan,
which was hammered out by 50 people during 60 hectic days.

Ford also said it expects to cut $6 billion from its annual cost structure
by 2010.

Production to be cut 26%

But fixing its core auto operations will come at a heavy price. According to
the plan, Ford will reduce its North American production capacity by 1.2
million vehicles -- or 26 percent -- over the next six years. Ford currently
has the factory capacity to build 4.8 million vehicles a year in North
America using 43 parts, stamping and assembly plants, but it only sold 3.3
million last year.

The job cuts will be equally severe. The 25,000 to 30,000 factory cuts
combined with the planned 4,000 white-collar cuts amount to up to 28 percent
of Ford's 122,000-person North American work force. Ford has approximately
87,000 hourly workers and 35,000 salaried workers. And, given Ford's losses
in North America last year, neither blue-collar nor white-collar workers can
expect meaningful bonuses. Ford said half the jobs the automaker is cutting
will be through attrition, while the rest will be through layoffs. He said
the company plans to help workers using buyouts and possible placement in
other plants.

Ford Chief Financial Officer Don Leclair said employee buyouts and other
elements of the restructuring plan could cost the automaker around $500
million this year.

Ford also committed to reducing its 53 corporate officers by 12 percent by
the end of the first quarter. Ford did not say which executives would be
leaving, but one of them is expected to be Steve Lyons, group vice president
over sales and marketing in North America.

"We will be making painful sacrifices to protect Ford's heritage and secure
our future," Bill Ford said.

Industry analysts said the moves represent a realistic assessment of Ford's
steadily declining share of the U.S. auto market.

"You have to praise their sense of realism, that they'll never get to a 25
percent share again," said David Healy of Burnham Securities. "They have got
to do this to survive."

Some on Wall Street, though, questioned whether Ford has gone far enough
given that Ford shareholders have suffered through an alarming drop in stock
value in recent years. Shares of Ford gained 42 cents, or 5.3 percent, to
close at $8.32 on the New York Stock Exchange Monday.

"We think (Ford) plans to be more aggressive with design and technology in
its vehicles, to be faster in the refreshing of its vehicle lineup and to
make added cost cuts that will help improve financial performance over the
rest of the decade," said Efraim Levy, an analyst with Standard & Poor's
Equity Research. "However, we do not believe the restructuring will meet all
of Ford's objectives and we think that not all benefits will accrue to the
bottom line."

Automaker looks long term

Ford said it would no longer provide earnings guidance beginning in 2006 --
a signal that it will focus on its long-term viability rather than
quarter-by-quarter results.

"We can't succeed in the long run if we're focused only on the short term,"
Bill Ford said.

The massive restructuring comes four years after Bill Ford announced a
similar plan to revitalize the company, which included some 20,000 job cuts
and several plant closures. He noted the earlier plan was successful in
returning the automaker to profit worldwide, but neither the goal of making
$7 billion a year in pre-tax profits by mid-decade or stabilizing U.S.
market share was achieved.

The new round of job cuts and plant closings pose a direct challenge to the
leadership of United Auto Workers union, which is already bracing for a
fight on similar issues with GM and Delphi.

UAW President Ron Gettelfinger blasted Ford's plan as "extremely
disappointing" and "devastating news for the many thousands of hard-working
men and women who have devoted their working lives to Ford."

Moreover, Gettelfinger said a showdown over the wholesale elimination of
jobs and factories is coming at the Big Three-UAW national contract talks in
2007.

"Certainly, today's announcement will only make the 2007 negotiations all
the more difficult and all the more important," Gettelfinger said.

But Ford can ill afford to continue operating at less than 80 percent of its
manufacturing capacity, Fields said.

"The hard but simple reality is that Ford has the costs, capacity and
staffing of a company that is much larger than our sales and market share
can support -- even under the best of conditions," Fields said.

A total of 14 Ford manufacturing facilities, including seven vehicle
assembly plants, will cease production by 2012. The first wave includes the
idling of five assembly plants and two large component factories by 2008.
Included among the shutdowns are assembly plants in Wixom; Atlanta, Ga.; and
St. Louis, Mo.; a transmission plant in Batavia, Ohio; and a casting plant
in Windsor, Ontario. In addition, Ford's assembly plant in St. Thomas,
Ontario, will be reduced to a single shift.

Two more assembly plants will be added to the list later this year. In
addition to the facilities named Monday, analysts also have predicted the
assembly plant in St. Paul, Minn., that makes the slow-selling Ford Ranger
pickup. Ford said it was not ready to name the other plants that will close.

Low-cost plant is in works

The automaker also said it plans to build a new low-cost manufacturing site
in North America, but did not provide additional details.

The cuts will have devastating consequences in company towns such as Wixom,
where 1,567 workers face an uncertain future when Ford's 49-year-old
assembly plant shuts down next year.

Wixom worker Venessa Seldon, 35, got an urgent phone call from her teenage
daughter Monday following Ford's announcement.

"She called from school and said, 'Mom, are we broke?' I told her that we'll
be OK," said Seldon, who works on car radiators at the Wixom plant where the
Lincoln LS, Lincoln Town Car and Ford GT are built.

Seldon, who has three daughters, was among a handful of employees who
trickled into Leon's Food and Spirits restaurant across the road from the
4.7 million-square-foot plant where Ford nameplates have been produced since
1957. Up until the last minute, she thought factory workers had a chance.

Michigan Gov. Jennifer Granholm said the Wixom plant closing is another
example of how the lack of a U.S. industrial policy on health care costs and
balance-of-trade issues is crippling American automakers.

"This is a story we have heard over and over again in Michigan," Granholm
said. "We're going to do everything we can to help these people, but I hope
this gets Washington to take notice that we have a problem."

Ford's problems in the market have been well-documented. Sales of its large
sport utility vehicles have tanked due to rising gas prices, and its
passenger cars had until recently fared poorly against offerings from
Japanese and European companies.

Still, Ford remains profitable, unlike GM.

The company said Monday that it earned $2 billion worldwide in 2005 on
revenues of $178.1 billion, but continued to bleed red ink in its North
American business.

The "way forward" plan highlighted Ford's future product strategy. The
critical component, Fields said, will be strengthening the company's Ford,
Mercury and Lincoln brands.

Carmaker keeps all 3 brands

Killing one of the brands was considered, but ultimately rejected, Fields
said.

"Ford is a stronger company with all three brands but if -- and only if --
each appeals to a different set of customers," Fields said.

He said all three brands had been burdened by conservative designs and slow
product-development cycles. By utilizing Ford's global vehicle platforms,
Fields said the average age of a Ford product in 2008 will be 3.2 years,
compared to 4.4 years currently.

Ford will also accelerate its development of small cars, crossovers and
hybrids. Fields said that hybrid versions of the Ford Five Hundred and
Mercury Montego sedans, and the Ford Edge and Lincoln MKX crossovers will
debut between 2008 and 2010. Ford also revealed that the upcoming Lincoln
MKS sedan will be built on the same platform as the Five Hundred and
Montego.

Still, the cost-cutting portion of the "way forward" will largely determine
whether Ford will be healthy enough financially to pursue its product blitz.

Prior to the plan's release, some industry analysts wondered whether Ford
downsizing would go far enough. Reaction from Wall Street was mixed after
Monday's announcement.

"We expect management to bring capacity in line with demand by one million
units, but question whether this will be enough, given continued declines in
market share," Jon Rogers, an analyst at Citigroup, wrote in a research
note.

Bill Ford conceded that cuts alone won't turn around the company his
great-grandfather founded more than a century ago. "You can't cut your way
to success," he said.

"Our 'way forward' is not a retrenchment. It's about taking back our
future," Fields declared, echoing his boss. "We are ready to reclaim our
place as America's car company."

You can reach Bill Vlasic at (313) 222-2151 or bvlasic@xxxxxxxxxxxx