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DETROIT — A top Ford Motor Co. executive told North American white-collar workers Thursday the company wants to cut its salaried work force costs by 15 per cent, and some people will lose their jobs.
President of the Americas Mark Fields said in an e-mail message sent to workers the cuts will take place by Aug. 1 “This unfortunately will result in involuntary separations of Ford employees and agency personnel as well as cost savings through attrition and the consolidation of open positions,” Mr. Fields said in the message.
It's in response to shrinking U.S. automotive sales brought on by $4 (U.S.) per gallon gasoline and a rapid shift to smaller vehicles from Ford's traditional moneymakers — pickup trucks and sport utility vehicles.
Ford spokeswoman Marcey Evans said the company had no target number of employees to cut, but each department has a salary cost-cutting goal.
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The Dearborn-based auto maker had 23,700 salaried workers at the end of last year. The company has cut the white-collar work force in North America by 10,800 since the end of 2005, mostly through attrition, early retirement offers and voluntary buyouts.
Ford announced May 22 that it was cutting North American production for the rest of this year and no longer expects to return to profitability by 2009. The company's sales fell 16 per cent in May compared with the same month last year and were down 11 per cent for the first five months of the year.
Although Ford made $100-million in the first quarter, it lost $15.3-billion during the previous two years and had to mortgage its assets to stay afloat.
Evans said workers who lose their jobs would get standard severance packages based on their years of service.
The cuts, reported Thursday by the Detroit Free Press, will not be applied uniformly through the company, Mr. Evans said.
“Each department has its own task. It's not an across-the-board sort of application,” she said, declining to say which departments might see larger cuts.
Ford plans to cut production by 15 per cent in the second quarter, 15 to 20 per cent in the third quarter and 2 to 8 per cent in the fourth quarter. The cuts will primarily affect pickups and SUVs, which have seen sales plummet in recent months due to rising gas prices and the slowdown in new home construction.
The company's F-series pickup truck, the top-selling vehicle in the U.S. since June, 2005, was dethroned last month by cars from Toyota and Honda. F-series sales were off nearly 19 per cent through May.
But Ford plans to increase its production of cars and crossovers through additional shifts and overtime. Ford's smallest offering, the Focus sedan, saw sales jump 35 per cent in the first five months of this year. The company sold more than 32,000 Focuses in May, and it's scrambling to increase the output of the lone assembly plant that makes the subcompact.
Ford isn't the only company to make cuts because of the U.S. market shift. General Motors Corp. earlier this week announced that it would close four pickup truck and SUV factories. Chrysler LLC made production cuts earlier in the year, and industry analysts say more may be in the offing.
Ford shares fell 7 cents, or 1.1 per cent, to $6.39 in late-morning trading.
