Ford cutting 25 to 30 thousand jobs

[charabby]

I think Ford rested too long and should have been more proactive years ago like Chrysler was with their cuts. Chrysler cut to the BONE years ago. I think GM will be soon folowing.

pinnie

GM annouced a large number of plant closings/layoffs late last year.

 

[dvcgirl]

Ford is in big, big trouble. Health care, foreign labor and pensions are putting the big behomeths out of business. The days where a blue collar worker could earn a big paycheck, stay for 30 years and punch out with a fat pension are disappearing right in front of our eyes. We're a global economy now, and companies like Ford and GM can't afford to pay their union employees many times the salary that foreign competitors are paying.

The upper mid-west is in trouble as well. While many parts of this nation have experienced off-the-charts real estate gains, folks in Ohio and Michigan either stayed flat or actually lost value.

 

[mickeysgal]

Ford is in big, big trouble. Health care, foreign labor and pensions are putting the big behomeths out of business. The days where a blue collar worker could earn a big paycheck, stay for 30 years and punch out with a fat pension are disappearing right in front of our eyes. We're a global economy now, and companies like Ford and GM can't afford to pay their union employees many times the salary that foreign competitors are paying.

Agreed. Pensions are being dropped from companies left and right. You simply can't count on them being there. Many companies are dropping or (most recently IBM) are freezing pensions. This is a huge dent in your retirement planning as those affected will lose the power of years of appreciation on these funds. However, at least they'll have whats currently there. Thats better than those that don't have one.

I believe we'll see a huge correction in the workforce due to the global economy. I can't see how unions will survive and continue as in the past. Either we're going to have to see unions reinvent themselves or we're going to see more of the same happening to other companies.

We sure do like the lower priced items coming from overseas though, don't we?

 

[GoofyDad869]

The days where a blue collar worker could earn a big paycheck, stay for 30 years and punch out with a fat pension are disappearing right in front of our eyes.

Part of Ford's problem is the 'fat pensions' Ford is continuing to pay out. Part of GM's problem is the same. Most of these workers are living a long time after they retire. Much, much longer than a number-crunching actuary in 1960 (or whenever) could estimate at the time they were calculating pensioner pay-outs.

Also, nobody else has brought up the point yet that these cuts will be happening through 2012. That's 6 years away.

30,000 jobs lost / 6 years = 5,000 jobs per year.

Bad, yes - but not as bad as it sounds. How many of those jobs are people approaching retirement? How many are actually happening in 2006? 2007? 2008? Which states? Which plants?

 

[Galahad]

30,000 jobs by 2012 (which was what was announces) is 5,000 jobs a year. Ford employes over 300,000 (125,000 in North America). That's 4% of the North American workforce a year. What is normal attrition and turnover? The number of "layoffs" will likely be FAR fewer that 30,000.

ETA - oops - didn't read GoofyDad869's post before posting mine.....

 

[Puffy2]

Ford's number one problem is that they build a car that is intended to only function properly for about the first 100,000 miles. Honda and Toyota build cars that last over 200,000 miles. It doesn't take a genius to figure out which one a person should buy in order to get the most for their money.

Ford will do better when they offer a better product.

 

[JimB.]

Also (IMHO), a lot of the "Big 3's" difficulty rests with either their inablility or unwillingness to take on foreign automakers "head on". For too long they have been saying "buy American" just because they ARE American companies.

Horse poop. Except for the new Mustang (which I hope to acquire one in the next couple of years) or the Fusion, Ford has not demonstrated much "sportiness" or innovation recently, whereas Toyota and Nissan have. Toyota will sell you ANY model car as a hybrid beginning next year. Ford? Chevy? Nope.

One of Ford's best investments is their 33% stake in Mazda (a FOREIGN auto maker).

If it were not for FMCC, the company would be deeply in the red .

Unfortunately, the company itself is to blame, from the head office to the assembly line worker, and they all will be made to pay, today, tomorrow &^ in the future.

 

[Puffy2]

In regards to the comments such as

"you can't count on the government or corporate america"

and the "fat pensions" problem :

No, we can't count on our government (Katrina and the Bush Administration failure of that one proved that).

And we obviously can't believe anything our employers tell us regarding how much they promise to compensate us for our labor (personally, I call that one "stealing" since a pension is part of a job package and if they fail to honor that package, well, it's just plain stealing from the employee)

So now that we have no retirement money and no government safety net, just how are these blue collar people supposed to "take care of themselves" in retirement? Especially when they make a salary that barely pays the morgage, car note, perscription bills, heat, gas, groceries, overly inflated insurance premiums that the companies don't want to pay anymore, etc....? They don't have any money to 'save' - shoot, most Americans have credit card debt in the thousands just so they can get by.

Rampent inflation (it's the highest it has been in five years) and salaries that fail to rise in response...these are weighty concerns. Our nation is in trouble. And it's clear that we don't have any leaders to lead us, so I guess you are right, we are on our own. Corporate America is only in it for themselves and the government just gets in the way or makes it worse.

 

[GoofyDad869]

Ford's number one problem is that they build a car that is intended to only function properly for about the first 100,000 miles. Honda and Toyota build cars that last over 200,000 miles. It doesn't take a genius to figure out which one a person should buy in order to get the most for their money.

Ford will do better when they offer a better product.

This practice has been called 'planned obsolescence'. In my opinion, it's also crap, at least in this day and age. It may have been true of domestics in the '80s and early '90s. Last I checked, that was a long time ago. Domestic automakers are NOT significantly behind Japanese or European manufacturers in terms of quality. For cites, look at J.D. Power, look at Consumer Reports, look at any automotive magazine. Not one exclude domestics in terms of quality control. By the way, I'm not a 'Buy American'-only scab - I do own a Subaru (which is owned by GM, by the way).

Horse poop. Except for the new Mustang (which I hope to acquire one in the next couple of years) or the Fusion, Ford has not demonstrated much "sportiness" or innovation recently, whereas Toyota and Nissan have. Toyota will sell you ANY model car as a hybrid beginning next year. Ford? Chevy? Nope.

Ford "Sportiness"? What about the Ford GT? I know it's a low production, high-price (too high, IMO) model intended to be a semi-exotic, but it shows what Ford is capable of.

Toyota will be selling you those technically advanced hybrid models at a severe loss per unit. They will make those individual & collective model losses up by increasing the profit margin on more popular, more expensive models. Hybrids are just not cost-effective YET. The battery cell alone costs more than all but the sexiest internal-combustion engine, and weighs 4 or 5 times most IC engines. Hybrids are not a mature enough technology for us to pin our hopes that they'll save us from the 'obsolete' IC engine. As far as 'innovative', the hybrid technology has been around in development since the early 80s. About as 'innovative' as the whiz-bang technology displayed in Spaceship Earth, which has been surpassed years ago (for the most part).

I agree with you that one of Ford's best long-term assets is its ownership in Mazda. Ford also jettisoned some "loser" marques (Land Rover springs to mind) a couple of years back - somehow that bit o' news didn't exactly make the front-page papers (maybe in Motown, but elsewhere?). Ford probably wasn't caught flat-footed in this - Ford & GM have been re-positioning themselves for years to better weather long-term problems.

 

[FreshTressa]

I think Ford has invested too much money in SUV's and SUV plants and they are going out with increasing gas prices.

Also, their other products just are not competetive.

This is in addition to the other issues such as having to pay for health benefits and pensions.

 

[Tigger_Magic]

Man this is sad.

I have to wonder though and I mean no disrespect, are the union demands hurting the company or is it something else.

This is part, but by no means all, of the problem. Ford, like other auto makers, spent years operating and negotiating like it was still the mid-60's (i.e., little significant FOREIGN competition). They failed to realize or accept that foreign competition was drastically altering the car purchasing environment forever. They stuck with the status quo and it slowly began choking them financially.

Ford also seemed to get (pardon the phrase) "stuck on stupid" by failing to realize that all car models have a brief shelf-life. They stuck with the Taurus line for over a decade, long after it should have been retired. In the meantime, Honda and Toyota began offering new models to compete and began pulling market share away from Ford.

Ford did ride the SUV bandwagon to some success but kept pushing it even after it became obvious it had run out of gas (almost literally). They are only now deciding they need to begin building hybrid cars.

For years Ford had plants focus on manufacturing one item or one model. They are realizing this much change and that they need to consolidate operations to save money. They are also realizing that for years they failed to implement innovations into their product line, often leaving their models without features, either standard or optional, available from competitor's models.

All this contributed to their slide from #1 in sales to #2 and the significant loss of market share. Add in the rising costs associated with contracts, salaries, bonuses and benefits -- Ford has to make changes or continue to lose market share. I doubt this would lead to the end of Ford, but unless they change they will never prosper again as a car maker.

 

[JimB.]

Ford "Sportiness"? What about the Ford GT?

I agree 100% about the GT. It is a SUPERIOR automobile. The body design is also from the 60's, not 2005. Not too much trunk spce though.....

But until Ford brings that innovation and creativity to it's "everyday" autos, the company will continue to languish.

BTW, I am a Ford Fan. My dad worked as an engineer for Ford waaaaaaay back in the 50's (but had ABSOLUTELY NOTHING to do with the Edsel ). I look for reasons to buy a Ford above all other makers, hence my as-yet unrequited love affair with the "new" Mustang.

And hopefull this new business model will make the company more pro active & less reactive.

 

[GoofyDad869]

hence my as-yet unrequited love affair with the "new" Mustang.

I have the same thing going on too - but in my case it's a Corvette Z06. Someday...

 

[mickeyfan2]

I look for reasons to buy a Ford above all other makers, hence my as-yet unrequited love affair with the "new" Mustang.

DH loves the 2005 Mustang that I bought him last July. It is a nice car for the price. I knew he would love the styling. And no I did not get him the GT and he is glad that I did not.

 

[Servants of Evan]

The Ford GT has always been my "I won the Lotto" dream-mobile. I have a collection of GT-40 toys/cars/etc. and have always lusted after one. With Ford actually building them again (as opposed to ordering a custom one from Hollman & Moody) I'm thrilled the Blue Oval was willing to take what was a super-cool show car concept into production. I've always wanted the 427 engine in the earlier chassis, complete with the scoops, etc -- the GT40 MKII-b for the truly retentive. Last summer, our family was driving down our local highway in the right lane when a new red GT went by safely cruising down the left lane. Ohhhhh, baby. That car must also have a great set of brakes because a sedan in the middle lane quickly switched to the left lane (without looking or seeing the GT) and the GT driver had to really get on the binders to keep from getting creamed. If I got one, I think I'd get one heck of a horn put in the nose!!!

As we speak of Fords woes, have we really taken a decent look at their newer offerings? The freestyle is pretty darn nice, and the Fusion is supposed to be a very good car. We'll be test driving both in the next few weeks and will probably purchase one or the other. The last I've heard is that roughly $2,500 of each car sold goes to pay healthcare for workers and retirees. You want to know what is killing american business -- healthcare. Ford is no different.

For those who have said the Taurus is too old, ummm.... how long have they been making Accords and Camerys? I drive a '99 Civic as my daily run-about and have been happy with my little Slice & Dice machine, jst as I hope to be happy with either Ford I choose...

 

[drakethib]

I have the same thing going on too - but in my case it's a Corvette Z06. Someday...

I am kind of hoping for the return of the Pinto.

 

[GoofyDad869]

For those who have said the Taurus is too old, ummm.... how long have they been making Accords and Camerys? I drive a '99 Civic as my daily run-about and have been happy with my little Slice & Dice machine, jst as I hope to be happy with either Ford I choose...

What I think the previous poster meant was that the Taurus had a very long generation. I only remember two iterations of the Taurus platform. I think the first generation Taurus design was around for 12 years (correct me if I'm wrong there). Domestic generations are longer cycles than Japanese generations. Your typical Civic gets a design change every 4-5 years, while your typical modern domestic gets one every 6-7 years. The Corvette is 51 years old, and it's only on its 6th generation.

The longer design cycles are another reason domestics are getting creamed. Who wants to buy a new Chevy when your neighbor's same model Chevy looks the same, and it's a 5 year old car? The Japanese can churn new models out faster than Detroit for a variety of reason (economies of scale, less bureaucratic wrangling, less home market redesign).

A couple of very good books that focus on modern domestic automotive production are "All Corvettes Are Red" by James Schefter which looks at the Corvette C5 design development and production. "Car" by Mary Walton looks at the Taurus 2nd generation design development and production.

 

[bcvillastwo]

Yes the Ford situation is sad, equally sad is what's happening with GM. I don't think Chrysler isn't doing very well either.

So, what's the problem? Well, lets face it there isn't just one problem there are a host of problems that collectively are resulting in Ford's decision to close plants and lay off people.

The biggest problem is that Ford isn't selling enough vehicles. If Ford was selling enough vehicles they probably wouldn't care about the other underlying problems such as:

1. Poor quality products (compared to the Japanesse cars)
2. Excessive executive salaries
3. High cost of labor (employee wages, pensions, and health care)

Poor quality products wasn't a big problem before the advent of quality Japanesse cars. However, now with greater competition buyers have more choices and many of them are taking their dollars across the street to the Japanesse and European manufacturers.

I have a two brother in laws who work for GM. Both say that GM is unable (at the present time under current conditions) to match the quality and price of the Japanesse cars. I suspect the same if true, or at least believed to be true of Fords as well.

From a business perspective I think Ford has no choice but to do exactly what it's doing.

 

[GoofyDad869]

I am kind of hoping for the return of the Pinto.

That's just WRONG!

 

[Planogirl]

I used to be a Ford fan too but I've been mad at them ever since they changed the TBird the last time. I understand that it wasn't done because of slow sales but because they wanted to get rid of another car that used the rear wheel drive base. OK, whatever...

But that aside, I see poor planning on the part of Ford all over this situation. The company only has itself to blame and I wonder if things will really change much.

Someone also commented that Ford employees should be retraining themselves in case of the inevitable. For what? Besides low-paying service jobs, what are these jobs that these layed-off people should expect to find? During one of the last big automotive cuts, many of the displaced moved to Texas. Good luck finding a decent job in this state nowadays.