Ford Motor Co., in Cost-Saving Measure, to Cease Automobile Production
Dearborn, Michigan, June 9, 2006 -- Ford Motor Company Chairman and CEO Bill Ford announced during an interview with Bloomberg TV today that, effective immediately, Ford Motor Company will flatline all North American automotive and truck manufacturing operations in an effort to reduce costs and improve shareholder value.
Mr. Ford said the move will allow the company to "focus on streamlining core competencies and regroup to more efficiently embrace evolving market structures". The announcement precedes a similarly dramatic paradigm shift next year by rival struggling automaker General Motors (see related article).
"Starting in 2007, we will be idling and selling off all of Ford's North American automobile manufacturing assets, with a commensurate reduction in salaried and non-salaried employees," Mr. Ford said. "This will dramatically boost our short-term liquidity, allowing Ford to focus on new directions, new customer-focused avenues of exploration that will effectively leverage Ford's powerful brand identity."
According to Mr. Ford, these new avenues, on which he declined to elaborate specifically, "may include manufacturing things, and then again they may not. By way of giving a preliminary indication, however, do you have any idea how many plastic and rubber squeaky toys American domestic parrots consume on an annual basis? It's more than you might think. A lot more."
Mr. Ford explained that the primary thrust of "The Way, Way Forward" plan, as he termed it, will be to rebuild, restructure and revitalize the Ford brand.
"Ford will be rolling out sweeping advertising campaigns worldwide explaining and touting the strengths of the Ford brand throughout 2007," Mr. Ford said. "Once our image has been rebuilt as the starting-point for American-made innovation and growth, we'll be appointing an internal task force to look into new ways to innovate and grow. And once that task force makes its innovative growth recommendations, you can rest assured our stockholders and the general public will be the first ones to know."
Ford's Way Way Forward plan for Ford calls for a 98 percent short-term payroll reduction, which will require layoffs over the next four months of 82,000 hourly workers in North America and a reduction by 6.5 percent in mid- and upper-level salaried management employee rosters over the next five to seven years. Bonuses to top-level managers will be capped at "low to mid eight-figure levels".
"Once we know which way the Way, Way Forward plan will lead us, there's a good chance we'll be able to consider bringing the option of re-hiring some of those hourly workers back to the table for discussion if we think it may prove beneficial to our shareholders, which is beneficial to our business, which is beneficial to America, which in turn is beneficial to American workers," Mr. Ford explained.
By Ion Zwitter, Avant News Editor
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