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Ford Unveils Job Cuts, Plant Closures
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Ford Unveils Job Cuts, Plant Closures

Business

MICHELE NORRIS, Host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

MELISSA BLOCK, Host:

And I'm Melissa Block. The Ford Motor Company revealed the details of its downsizing plan today. The company plans to close a total of 14 manufacturing sites over the next six years. In that same timeframe, Ford will eliminate 25,000 to 30,000 factory jobs, more than 20 percent of its work force in North America. But Ford officials also said they did not believe the company could shrink its way back to prosperity. NPR's Jack Speer reports.

JACK SPEER: It's not every car company that can call on the grandson of an automobile industry founder to deliver the bad news. But Ford can. Chairman and CEO Bill Ford told the crowd at this morning's event that the old ways of doing business no longer work. He said the company has to stop designing vehicles to fill plants and start building cars to satisfy customers.

BILL FORD: By taking the actions we are today, in the long run, we will create far more stable and secure jobs. We all have to change, and we all have to sacrifice. But I believe this is the path to winning.

SPEER: But it's clear that before it can hope to win again, Ford will need to get smaller. The plan, optimistically dubbed "The Way Forward," calls for the closure of major assembly plants in St. Louis, in Atlanta and in Wixom, Michigan by 2008. Parts plants in Batavia, Ohio and Windsor, Ontario will also be closed. Ford says the cost cutting will help it return its North American operations to profitability by 2008. Mark Fields, a key architect of the plan, says while the cuts are painful, they're also necessary, and that ultimately the company will work to reduce the human toll.

MARK FIELDS: Today we find ourselves with plants running at about three-quarters of capacity, and that is clearly unsustainable. Obviously, this has significant implications for our labor force. It's something we knew we would have to address honestly and with sensitivity to the impact on Ford employees and their families.

SPEER: The United Auto Workers released a statement saying the announcement left a cloud hanging over the entire work force because of pending announcements of additional facilities to be closed. As for workers at the targeted plants, some said they were already expecting the bad news. Mark Gilmore has worked at Ford's Hapeville, Georgia plant near Atlanta for about a year.

MARK GILMORE: It's an all right job, but it's not going to last too long now, I guess. See, I just moved down here from Ohio last year, because I thought it would be a little more stable spot to be in, and it turned out not to be that way.

SPEER: Gilmore was somewhat philosophical about the cuts, but he says that's not true of everyone.

GILMORE: People are upset, you know. The people that kind of saw it coming, maybe started planning ahead, maybe are not as upset, but there's a lot of people who, you know, do something for 30 years, you know, 25 years, and that's all you know, then that's all you — somebody take everything you've got away, you know, it's kind of rough.

SPEER: And while 25,000 or 30,000 job cuts seems huge, there were those who wonder whether even it will be enough to stem the losses in Ford's North American auto business. David Healy is an analyst at Burnham Securities.

DAVID HEALY: I think they'll accomplish the cost cutting. Whether they'll turn around the product line and stabilize the market share is a question. I think the jury is very much out on that one.

SPEER: It's not clear whether Ford will have a cooperative union. Early signs are the UAW may prove difficult. In a statement today, the union noted workers affected by Ford's actions are covered under a job security plan, an agreement the union plans to enforce vigorously. While Ford lost $1.6 billion in North America last year, overall, the company remains profitable. That's in part due to Ford's sale of Hertz rental cars and its healthy auto finance business.

Jack Speer, NPR News.

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