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Tuesday, April 05, 2005

More Pain at Ford, More Jobs Lost in Detroit

Ford has announced that it will be cutting 1,000 or more white collar jobs, most in the Detroit area. Read the Detroit News story here. Some employees will be offered "voluntary separation" packages, as they are called in the business, and if not enough people sign up for those, there will be "involuntary separations".

If it can't entice enough employees to accept the offers, "we may have to resort to involuntary separations," Greg Smith, executive vice president and president of Ford's Americas operations, said in an e-mail obtained by The Detroit News.

It amazes me that Ford is cutting North American employees, when its financial problems are much larger. Jaguar just required an infusion of $1 Billion, and employee healthcare costs are sucking the profit from every vehicle sold. 1,000 salaried employees works out to a savings of about $100 million. This is significant, but it is not on the order of magnitude of Ford's problems.

Ford needs to be careful not to cut too deeply. At some point, there will not be enough people to handle the workload of the new product onslaught, and Ford will have to make some tough decisions. Like the old engineering joke goes, you can have something done cheap, done fast, or done right, pick any two.


Anonymous said...

It is Ford's own fault. If they made better cars, and didn't fall so far behind the Japanese, they would not be in this position. You can't keep selling junk and expect people to keep buying it.

Anonymous said...

To bad Bill Ford can't see fit to give some if his $22M to remedy this situation.

Anonymous said...

Most of Bill Ford Jr's pay is in the form of company stock options, I believe. And, he donated a whole bunch of that to a scholarship fund for Ford employee children. He also had been working for no cash salary at all.

Bill Ford is a good guy. It is th e people under him I am not so sure about.