Ford's 'Way Forward' V.2

The Ford Motor Company's latest plan to salvage its business includes pay-outs to unionised workers in an attempt to shed 30,000 employees by 2008.

Ford is offering buyouts or early retirements to each of its 75,000 employees represented by the United Auto Workers and intends closing two plants over the next three years.

A similar offer was made by GM in its 'Special Attrition Program' in March this year, reducing the company's workforce by a third and providing "a fast start toward achieving [GM's] objective of reducing global structural costs".

In a company statement late last week Ford says it plans to close another seven factories by 2012 and wants to cut vehicle production in North America by 26 per cent by 2008. Ford will also shut down or sell its spin-off Automotive Components Holdings -- formerly Visteon -- factories.

Recently appointed CEO Alan Mulally said: "Turnarounds of this magnitude succeed when capacity and costs are aligned with a realistic expectation of demand. We will focus on the needs of our customers in North America, and around the world."

Despite the company's admission that its concentration on large vehicles is out-of-line with current customer demand, Ford says a full-size crossover based on the Fairlane concept (pictured) will be offered in three years. The company also confirmed a new 'Super Duty' pickup for early 2007 and an all-new F-150 for '08. Ford says that 70 per cent of its products (including Lincoln and Mercury) "will be new or significantly upgraded between now and the end of 2008."

Ford accepts its share in the US auto market will end in the 14 to 15 per cent range; about where Toyota sits. The number-two spot is barely cold but Toyota has been quick to claim the position, pointing out its "latest milestone comes just three months" after taking third position in terms of American sales.

Bill Ford Jr dismissed suggestions that losing the number-two ranking is damaging Ford's image. "Frankly, ranking doesn't matter," he told Detroit News. "We've seen companies over the years chase market share with sometimes disastrous results."

Analysts say the plan, expected to cut operating costs by approximately US$5 billion, is insufficient to stem Ford's losses. "The plan does not address the tremendous losses at Jaguar or asset sales or materially accelerate product introductions," said John Murphy of Merrill Lynch. "It's missing a lot." Ford says it doesn't expect a profit in North America until at least 2009.

In related news, Ford's top woman Anne Stevens has resigned. The first female executive vice president in Ford Motor Company history, Stevens was part of the original 'Way Forward' plan. She joined the company in 1990 as a marketing specialist in the Plastic Products Division, moving through the international manufacturing ranks and in 1995 became the company's first female plant manager in Europe, as well as leading product development of Ford's European small cars.

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