Ford May Close 5 North American Plants

DETROIT (AP) -- Ford Motor Co. workers and local officials said Friday they'll do everything in their power to keep plants open after a report suggested Ford is considering closing five North American plants as part of a major restructuring. Lawmakers and union officials said they would pile on tax breaks or change plant work rules to encourage Ford to stay. In Minnesota, House Speaker Steve Sviggum, the Legislature's top Republican, said he wouldn't rule out pushing for a special session to consider incentives for keeping a plant in St. Paul.

"We're not going to let this go without a fight," he said. "We're going to give every incentive we can to make sure these jobs are maintained."

The Wall Street Journal reported Friday that the nation's second biggest automaker is likely to close assembly plants in St. Louis, Atlanta and St. Paul under a still-evolving restructuring plan. It cited two unidentified people familiar with the automaker's product plans.

The newspaper said an engine-parts plant in Windsor, Ontario, and a truck-assembly plant in Cuautitlan, Mexico, also are slated for closure.

If Ford closes the plants, it would deal another blow to U.S. autoworkers, already reeling from a plan announced last month by General Motors Corp. to close 12 North American facilities and cut 30,000 jobs. The nation's car manufacturers are suffering from declining sales, especially of sport utility vehicles, even as the cost of labor and health care rises.

Ford shares rose 5 cents to close at $8.15 on the New York Stock Exchange on Friday.

Together, the Ford plants cited in Friday's report employ around 7,000 people, according to Ford's Web site. Ford had a total of 122,877 North American employees at the end of last year. The Dearborn, Mich.-based automaker has around 324,000 employees worldwide.Ford has been struggling with declining U.S. market share, high labor costs and excess plant capacity. The company reported a $1.2 billion pretax loss in its North American automotive operations in the third quarter.

Ford Chairman and CEO Bill Ford has said the company is working on a restructuring plan and will reveal details in January. Bill Ford said in October the plan will include "significant" job cuts and plant closures.

Ford is only using around 86 percent of its North American assembly plant capacity, compared to 107 percent at rival Toyota Motor Corp. Ford has 23 assembly plants in North America.

"Obviously, we've indicated we will address our excess capacity," Ford spokesman Oscar Suris told The Associated Press Friday. "We've been pretty consistent in saying we'll share these plans in more detail in January. Nothing is finalized."

The United Auto Workers refused to comment on the report, saying it is speculation.

At the Ford plant in Cuautitlan, just north of Mexico City, said rumors about downsizing have been floating around for some time, and the 750 workers there are willing to discuss labor changes to keep the plant open.

"We believe that we represent a good business opportunity for Ford," said Juan Jose Sosa, the national representative for the Ford workers union in Mexico. "We are open to considering reasonable alternatives ... and a better use of labor," he said.

Danny Sparks, head of the local union at the Ford plant in Hapeville, Ga., near Atlanta, said the report of a possible closure came as a surprise.

"We're one of the most efficient plants Ford has. The Atlanta employees have a long history of stepping up to the task at hand," Sparks said.

Chuck Moore, director of the Detroit-area restructuring firm Conway, MacKenzie and Dunleavy, said the plants are the subject of speculation in part because of the products they make.

The Atlanta plant makes the Ford Taurus sedan, which is scheduled to be phased out next year. The St. Louis plant makes the Ford Explorer and Mercury Mountaineer, two vehicles which have been struggling. Explorer sales were down 30 percent in the first 11 months of this year despite an extensive redesign, according to Autodata Corp.

The St. Paul plant makes the Ford Ranger pickup, which also saw sales fall nearly 25 percent between January and November, and the Cuautitlan plant makes the F-150 and Super-Duty trucks that could be consolidated elsewhere, Moore said. Ford has four other plants that make the F-150.

GM's announcement got little reaction from Wall Street, in part because many of the changes won't take place until after GM and the UAW negotiate a new contract in 2007. Moore said Ford could get the same reaction unless its restructuring plan takes effect sooner, although Ford also is locked into a UAW contract that won't be negotiated until 2007.

Moore said Ford also has to make clear how it plans to stem its market share losses. Ford's U.S. market share fell to 17.4 percent in the first 11 months of the year, down from 18.4 percent the year before.

"Without stabilization of the market share, it's just going to require additional cost cuts and additional closures," Moore said.

Yet another $.02 worth from a proud owner of a 1970 Mach 1 351C @

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Reply to
Grover C. McCoury III
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UAW, Ford, GM and Chrysler must sit down and find a way to stop the bleeding.

Time for UAW to establish strict workplace standards.. spend less time defending workers from charges of drug use / dealing, more educating how they are all in danger.

Time to kick the MBA's out of Automotive middle management and establish "Quality as Job1 !" ethics.

- Still signs of 'quota management' in plants, which ignore rework rate

Time to figure out a way to pay into a joint benefits fund from cars/vehicles sold.. regardless of origin.

Reply to
Backyard Mechanic

I been buying Ford for 20 years. I took my Ranger in for a transmission overhaul. $2000. 6 months later I had to have it done again. Another $2000. I took my Aspire in for a head gasket. Cost $1500 and it still needs a head gasket. I needed a new car. I watched the Ford ads for months. Never able to buy one at the advertized price. So I bought a Toyota. Maybe Ford should die.

Reply to
Pat

I might ... agree with this (GM & Chryco too). It's time the government figured out the cost/benefits of having the US design and assemble it's own vehicles. US workers are too valuable to spend their time screwing nuts onto studs. The US should be computerizing the world that's where the money is at the moment.

Focus on the future, allow the past to die (or at least move to China/Mexico). Subsidize the future, not the past.

Reply to
joe schmoe

Sounds more like your mechanic was ripping you off.

Reply to
Brent P

And perhapse pay CEOs and such only $4 million a year instead of $8 million and make a "profit rainy day fund." Yeah I'm all for profit and free trade and such and I am definately not a Socialist, but any mildly intelligent person must agree that some CEO salaries are far beyond outrageous.

Reply to
WindsorFox

CEO compensation is only outrageous when executives are rewarded for poor performance. If they make their company billions, why shouldn't they receive their cut ? Given a good CEO is very hard to replace. However, there are plenty of examples of poorly performing (ceo)s making way too much.

CEO G. Richard Wagoner, Jr. of GM made $4,817,020 last year. John M. Devine Vice Chairman and Chief Financial Officer of GM made $4,223,650. These figures are small compared to after tax income of 2.1 billion last year.

William C. Ford, Jr. Chairman of the Board, Chief Executive Officer made $12,185,696 in long term compensation last year (no salary or bonuses) and $21,477,502 in options. James J. Padilla President, Chief Operating Officer, Director; Chairman - Automotive Operations made $7,250,625 last year (only one million in salary) with $1,994,724 in options. Again, these are small compared to the 3.9 billion ford made last year in income after taxes.

By comparison, WMT CEO H. Lee Scott, Jr. earned $12,593,493 plus $4,537,582 in options. And John B. Menzer, Vice Chairman of the Board, earned $5,390,386 plus $5,630,359 in options. One could argue that these figures are fair, considering Wal-Mart made 10.5 billion after taxes last year.

Here are the top 10 highest paid (CEO)s. First colunm is this year's compensation in thousands, and the second column is compensation over the last five years.

1 Terry S Semel Yahoo 230,554 258,291 2 Barry Diller IAC/InterActiveCorp 156,168 239,846 3 William W McGuire UnitedHealth Group 124,774 342,284 4 Howard Solomon Forest Labs 92,116 294,895 5 George David United Technologies 88,712 210,793 6 Lew Frankfort Coach 86,481 154,087 7 Edwin M Crawford Caremark Rx 77,864 93,563 8 Ray R Irani Occidental Petroleum 64,136 127,447 9 Angelo R Mozilo Countrywide Financial 56,956 96,914 10 Richard D Fairbank Capital One Financial 56,660 226,268

It's also interesting to note that Ellison of Oracle made ovre 867 million over the last five years!!

Here are the wost performing CEOs : Notice the high compensation despite the negative return.

Peter Cartwright Calpine Tenure: 21 years Annualized return during tenure: 4%* Relative to S&P: 96

6-year annualized return: -7% 6-year average compensation: $13.0 million

Steven R. Appleton Micron Technology Tenure: 11 years Annualized return during tenure: 1% Relative to S&P: 91

6-year annualized return: -13% 6-year average compensation: 9.3 million

Thomas A. Renyi Bank of New York Tenure: 8 years Annualized return during tenure: 6% Relative to S&P: 100

6-year annualized return: -2% 6-year average compensation: 13.8 million

Martin G. McGuinn Mellon Finl Tenure: 6 years Annualized return during tenure: -1% Relative to S&P: 98

6-year annualized return: -2% 6-year average compensation: 5.5 million

Lee R. Raymond ExxonMobil Tenure: 12 years Annualized return during tenure: 15% Relative to S&P: 104

6-year annualized return: 11% 6-year average compensation: 22.8 million

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Reply to
fclaugus

"SOME"???????? It's like sports, and Hollywood. How much does one person need? The president, no matter what party, can wipe out the world with the push of a button, or not... and get's $400K (I think that's what it was raised to). A sports figure gets millions for playing a game, and there are a very many others who would gladly play for less if given the chance. Union workers get a decent wage, but union leaders rake in millions... to do what? How much does it take to say "strike"? And CEOs not only get their multi-million dollar salaries, but, get that Golden Umbrella even if the corporation loses money and they get sent packing years before their contract ends. There doesn't have to be an equal balance, but there really should be a bit more parity.

Reply to
Spike

I'm not so sure they can do anything to stop their decline. They are likely in a no-win scenario. If they become more efficient then they will need fewer workers (i.e. layoffs required) or if they are paid more then the cost of domestic cars won't be competitive with foreign competition. It is ever more affordable goods and services that support our relatively high standard of living. We all make choices every day that cost someone a domestic job somewhere. Whether it be a car, underware, toothpaste, a wrench etc. we all usually choose the least expensive item that gets the job done. Same goes for businesses. If everyone decided to buy nothing but domestically made goods from tomorrow forward we would all have less disposable income and many goods we would have to do without because they are no longer made here in the USA. This, in turn, would effect the overall health of our ecomony and standard of living.

IMO, the USA's work force is returning to a state that puts more responsibility on the individual for their economic well being. There are plenty of jobs available but not enough qualified people to fill them. Today too many people see a college education as optional and jobs that require good math and technical skills as too much of a hassle to get qualified to fill. People that refuse to educate themselves and work to become skilled in a technical field will suffer the economic consequences. The days of making $40/hour to spray paint bumpers are rapidly fading. Just like buggy whip makers had to reinvent themselves a 100 years ago so do many workers today. IMO, it is the flexibility to reinvent ourselves when needed that really gives us a great economic advantage over many other countries. It is good that we let the market determine employment needs and not let markets be overly influenced by government control. We have some good examples over the last 100 years (i.e. Socialism, Communism) that show that too much government control is a very bad thing.

Reply to
Michael Johnson, PE

Very good points, IMO.

Reply to
Michael Johnson, PE

While few might see the parallel, this is a problem which has plagued civilizations throughout the ages. As populations grow, and advances are made in work efficiency, less people are needed to produce the inventory.

Reply to
Spike

Which is most of the time.

Shouldn't an engineer who does the same get his?

I saved an major US corporation I worked for aproximately $12,000,000. What was my cut? 0. Zero. I would have gotten my salary and bonus by just leaving the crap design I inherited in place and making it work, without creatly a vastly less expensive and more reliable one.

Such a performance arguement makes best sense if it's used across the board. If people just get their salary / wage and some convouted bonus based on company wide performance, that's all the CEO should get. If the CEO gets paid for specific actions that effect the bottom line in a commission type basis, so should everyone else.

If you really believe in the performance arguement I should have had a least 1% of what I saved the company. I am sure the CEO got more than 1%.

Reply to
Brent P

CEO salaries for what they really do make me sick and is hurting the creativity in the US. I am really surprised that not very many CEO get killed from upset employees. CEO's salary should be no more that ten times the average of the working employees which is reality is still to high but at least would cap it somewhat and would also increase at 10 times the rate of the working employees.

Brent P wrote:

Reply to
user

I agree they make an obscene amount of money. What is it? Three percent of the population controls 90% of the wealth? Still, while there is no doubt they make far more than seems reasonable, when you begin to cap salaries, you violate the premise of free enterprise. And if you can cap a CEO salary, why not a worker's wage? Then, as long as you are at it, restrict everyone to "from each according to his ability; to each according to his need". The Soviet Union would write a glowing testimonial to the concept. It comes down to whether the shareholders are willing to part with that much in profits in order to reap the share they do. They are the ones who control, in most cases, who the CEO is and how much he/she gets paid.

Reply to
Spike

You have a good point. And this would be different if you had this built into your contract, not that your company would agree to this, however. They perfer to pay you a flat salery for your services.

A good ceo is hard to get, and companies are willing to pay large high sums if they believe it gives tham a competitive advantage. If paying a better ceo 5 million more makes the company 100 million in profits, isn't he worth the extra money ? The problem is, many executives are overpaid. And if I worked for a company that had to fire me to save money and still paid their ceo millions, I'd be pissed. Mad that the ceo makes more money by reducing costs, which happens to be my salery. But little can be done... Stockholders need to hold executive pay in check.

A lot of perfessions would perfer to work for a salery rather than comissions or performance bonuses. While thay might get paid more, their pay will fluctuate more with too much uncertainty.

I believe employees should be paid according to their impact on the bottom line, and I do believe you deserved some sort of bonus for your efforts, more than 1%, imo.

Fred

Reply to
fclaugus

What do we do when we have to go to war with China, Depend on Mexico or Korea to manufacture our tanks, Bradleys and other military vehicles. Bring back all the smokestack industry .

Reply to
Donnie Shortpants

One only "needs" to go to war when you're trying to protect the past. If one is moving to the future, other countries trying to get in on it will assist and even open up to you. The Soviet Union didn't fall because it didn't have enough smoke stack industries.

How many tank factories are in Switzerland?

When all the competent men in a country are armed trained soldiers both the foreign enemies and the domestic government treat the citizens with respect. (that was the logic behind the second Amendment if I recall correctly).

Would the North Korean or Canadian governments treat it citizens with such contempt if they knew the citizenry had the means and the will to remove & replace the whole government structure? (Yes, I acknowledge the Canadian problem is one of will power).

PS if there's ever a war between China and the US a hundred tank factories wouldn't make a bit of difference, Tanks are somewhat ineffectual against ICBM's

Reply to
joe schmoe

I agree. I believe that years ago a number of companies implemented an employee "suggestion box" that paid a percentage of net profits to the person suggesting it. (if I recall GM had it in place for a while) which worked rather well.

You should have gotten a cut, you may well have even done so if you had documented what you had done, shopped out your services to establish what you were worth to the company or others and asked for a raise or gone to a company more interested in your services (i.e. willing to pay more).

Shortly after I left high school I worked for a company that refused to pay their top performing salesman above their maximum level regardless of what he produced. He left, a year later the company folded. He got his raise, the companies owner got the shaft for being an idiot.

Unfortunately many CEO's wages are "determined" by a board stacked with their friends. Makes it hard to constrain pay. However Enron, World Com, Tyco and others have inadvertently done their part to bring Board members into line. Watching Conrad Black of late has brightened my days.

Reply to
joe schmoe

Sure... like the decisions the one of my now former employer made. He's still got a job as do all the executives and senior management. (Today was a surprise sacking day, about ~1/4-1/3 of the company I figure and half my group gone and I was in the half that's now gone.) And that's what gets people miffed. There is one senior executive who is mostly retired who is still drawing a 80% of his salary (as I heard) from before he did semi-retirement and wasn't sacked. His pay could have left probably 4-5 of the junior engineers in jobs or a couple of more senior engineers and caused no impact to the company to have him just finish his fade out.

CEOs don't just work for performance. They have base salaries. If CEO's just worked for bottom line performance there may be less of a backlash. I'd like that same deal that is always trotted out as an excuse for huge CEO pay scales. I'd like a bonus that was actually tied to the dollar amounts I added to the bottom line.

Another reason I believe it's valid to complain about CEOs is that they have the power to manipulate things in the company to their own personal favor and often do, sometimes at great cost to the rank and file.

Thanks :)

Reply to
Brent P

You are correct, I've never been much of a braggart or one to do the self promotion, more one who lets the work speak for itself and it cost me politically in that environment.

That's a nice difference between a publicly traded company and private one. On a publically traded company it's almost impossible to shaft someone like that.

That's another factor that ticks people off about it that I had forgotten.

Reply to
Brent P

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