• Jan 23, 2006
Here we go...
BTW - Here's the webcast if you can follow along at work.

Liveblogging coverage from both Bill Ford's and Mark Fields' speach, the "Ford Fights Back" press release and LIST OF PLANT CLOSINGS after the jump...

Q&A session also can be found after the jump...
NEWS ON PLANT CLOSINGS:

Ford is taking the following new actions to align its capacity with expected demand and to reduce fixed costs:
    •    14 manufacturing facilities will be idled and cease production by 2012, including a total of seven vehicle assembly plants.
    •    Assembly capacity will be reduced by 1.2 million units or 26 percent by the end of 2008.
    •    A new low-cost manufacturing site is planned for the future.

Ford will idle the following facilities through 2008:
    •    St. Louis Assembly
    •    Atlanta Assembly
    •    Wixom Assembly
    •    Batavia Transmission
    •    Windsor Casting (announced following CAW contract negotiations in 2005)
    •    Two additional assembly plants, which will be determined later this year
In addition, production at St. Thomas Assembly will be reduced to one shift.

Excerpts of Mark Field's speech:

Promises a level of candor and asks for an open mind and judgment based on Ford's results. 2008 is the target year for Ford's North American operations to return to profitability.

More talk of end of "Big Three" and "Up for grabs Big Six" in the global market.

Cites Mazda as a successful business model by having made customers more of a focus.

"Change or Die" mentality acting like a smaller company are what will make Ford's plan a reality.

Acting "smaller" not about becoming smaller, but rather stop being conservative, taking more risks and being more accountable.

In order to stand out in the market, Ford's products need to be clear, relevant and distinct. Differentiate by design and safety innovation and technology like hybrids.

Talking about internal discussions about killing Mercury... Fields decided against recommending it because the company would be stronger with all three IF each sold to separate customers.

"Red, White and Bold" -  not an advertising tag line, but internal rally cry.

Wants to make Ford products unmistakably American like Volvos are unmistakably Swedish. The F-Series and Mustang already have that.

Talking about Mercury now, success of Milan, Montego and Mariner.

Customer looking for product functionality similar to a Ford, but different design personality. Talks about Apple's iPod customers, saying these same customers buy the Mercury Mariner and Milan. C'mon...

Admits Lincoln lost focus and created confusion. Vision is to make customers proud to own a Lincoln, make the brand a reward for people. Lincoln customers don't need to shout about their success (knock on Cadillac).

Moving Lincoln to be a larger contributor than Mercury to Lincoln/Mercury, but reaffirms Lincoln will not be sold on the world's stage.

Reaffirms commitment to 250,000 hybrids by 2010, including Five-Hundred, Montego, Lincoln MKS and Edge.

Ford will be ready with bold and innovative small cars for the new market (shows design of Ford Reflex concept). Talks just a bit about Ford Fairlane concept, seems something like this will definitely be coming soon.

Four more cars and crossover will be added to the three already produced on the Five-Hundred architecture, including V6 and V8 hybrids.

Ford basing its product on Mazda's successful model: flexible manufacturing, quicker to market, etc.

On its way to shifting 75% percent of its plants to flexible manufacturing by 2008.

Readopting quality is Job 1 mentality to improve quality in product development and manufacturing. Giving quality teams in plants the budget and authority to make necessary decisions to improve quality.

"Irrational pricing and incentives started by competitors" cannot continue. Reestablish value of Ford products by clear and simple pricing in order to improve each vehicle's residuals. Cites the success of the Ford Fusion and its higher residual value.

Mustang, Five-Hundred and Fusion sold with three-year residual value approaching fifty-percent. Sounds like a goal for every vehicle.

Pursuing more parts commonality in areas invisible to consumers to bring costs in line and make long-term agreements with key suppliers to bring costs down over time.

Reducing fixed costs - bringing capacity back in line with customer demands. Time to shrink back what to sales can support.

Plants are running at 75% capacity, which is not sustainable.

Idling or ceasing operations at 14 plants by 2012. Reducing assembly capacity by 1.2 million units by 2008. Most of these actions are occuring early in the plan period. Cutting plant employment by 25,000-30,000.

New low cost manufacturing operation to be built somewhere in North America at a place and time to be determined.

Just called the Lincoln/Mercury dealer network "the envy of the world" with a straight face.

"Way Forward" is not a retrenchment, but about cutting Ford's own path and being bold, American and innovative.

Excerpts of Bill Ford's speech:
Bill Ford's talking about changing the business model.

Ford will no longer publish annual earnings guide.

"True Customer Focus" - "If they'll buy it, then we'll build it"

Reducing capacity in North America and design cars for customers and not just to fill factories.

More talk about "unleashing innovation" and using innovation to resolve contradictions, like power and fuel economy.

Company learned a lot from launch of Ford Escape Hybrid, combining engineers and scientists while at the same time removing the pressure of management. Tearing down "beauracratic walls".

Bill Ford: changes have already begun. He cites F-150, Ford Five-Hundred/Mercury Montego, Ford Fusion/Mercury Milan/Lincoln Zephyr as examples of new way of doing business.

Becoming farsighted, customer focused and innovative are the keys to Ford's future.

Jim Padilla takes the mic... talking about global operations and 2005. He reiterates Ford was profitable in EVERY region except North America while introducing forty models. The company has gained market share in Russia, Turkey, China and India.

He brags a little about Land Rover and Aston Martin making money, as well as Mazda's cohesive brand identity that's been driving its sales success.

"Global product synergy" - talks about C1 technology. Focus produced in ten different plants around the world. Also Mazda3 and Volvo S40 in even more plants. (Why not here?!?!?)

D30 architecture - Volvo XC90 originated it, Ford Five-Hundred and Mercury Montego evolve it.

Everyone keeps referring to Lincoln's MKS as the Mark S.

Keeps mentioning global "synergy" and talking much more about what Ford's done rather than what the plan going  forward is. Seems that technology sharing with Ford brands around the world will a big focus. That's what he means by "synergy".

Excerpts from Don LeClair's speech:
Chief Financial Officer Don LeClair takes the stage to talk about the numbers... this guy is not a natural born public speaker like Bill Ford and Mark Fields, so bear with me as I try to listen whilst fighting off the urge to lapse into a coma.

Expected Industry Volume in US to be 17.1 mil and 17.9 mil in Europe.

Targeting year end cash balance in excess of $20 billion.

***Sidenote - These guys need to get a better version of PowerPoint or a copy of Keynote. These slides look like they were made on a machine running Windows95.

Ford Financial will be solidly profitable in 2006, though not as much as in 2005 because of sales of Hertz.

There's a break in the presentation and we're on standby, so take your coffee/smoke/watercooler break now... It'll be about ten minutes before the media and investor Q&A starts.

Q&A session (the questions and answers are not literal quotes, but excerpts and rewordings of the discussions going on):

Should we expect a financial impact from Way Forward in 06?

A: Yes, plant idlings, personnel reductions, material cost reductions will all realize real savings this year.

Asia/Pacific region - India and China will be invested into heavily. New plants are being built and new products will be launched this year in those regions.

Does Way Forward assume Ford maintaining a flat market share through 08?
First step is to stop the erosion of market share.

Where can we can hold Ford executives accountable for the success of this plan?
A: The material costs numbers, whether or not Ford returns to profitability by 2008. When the 2002 plan was laid out we were very specific in our metrics. Way Forward lays out tough internal metrics, but market is fluid and we need to be manueverable. We want true retail growth, organic growth in market share.

Global architecture strategy - more specifics?
A: Efforts in Europe and PAG have made tremendous advancements in global architecture. C1 Focus is best example of global architecture. The new S80 and S-MAX/GALAXY will be the same way. Have already consolidated passengar cars, and next we will consolidate pickups and SUVs across our global brands.

How will you offset lower profit margins of small cars?
A: Global architectures are one way, and reducing Ford's cost structure by idling and closing plants are another. But you can drive revenue by developing better designs, as well.

What will you do when one of your key partner suppliers is offering you a component at a higher price than another supplier?
A: In all supplier processes there is waste, and we will focus on how we can eliminate those wastes, which will realze substantial savings. We're not being driven by the "quote of the day" but rather building long term relationships with our suppliers.

(For Mark Fields) What would be the one or two or three examples of vehicles within Ford that you would say represents Ford's bold design going forward?

A: Mustang, Fusion and the new Ford Edge.

Products about to come out look a lot like brand reengineering. What are you going to do next to buld your three brands back up?
A: The clear assignment is that each brand has a design theme or philosophy that engineers and designers can work from on products after product. Head Designer Peter Hornsbury will be leading this charge in design. Look at Volvo S40 versus Mazda3. They have unique brand identity though share underpinnings.

Question about low-cost manufacturing plants?
A: It will be North American and its key criteria will be low cost. Won't answer specifics like whether or not it will be union.

Todd Lasso from MT: Talk about the future of Jaguar.
A: Bill Ford - we have our work to do to get the business case for Jaguar correct.
Jim Padilla - look for a lot more synergy with Land Rover. Powerplants will be commonized, as well as electrical systems. Both teams have gone to a core shared engineering approach.

Sarah Webster from Detrot Free Press: When will we know when all facilities will be closed?
A: We've announced three today and will announce two by the end of the year, but a lot of consideration goes into closing a plant. We're committed to making these determinations as soon as possible and working with those communities that are affected.

How is your plan for Mercury/Lincoln different from what you're doing now?
A: It's building on what we're doing right now and have been doing for a while. Mercury is getting conquest buyers and a lot of women buyers, and we want to build on that.

Guidance on realligning product offerings?
A: Over time we'll see Ford's product portfolio shift and evolve. We have talked about CUVs and small cars, but beyond that we won't go into more detail until the right time.
Bill Ford: look at hybrids, biofuels, innovations in safety. Look at in terms of how we are going to make every one of our products different.

What are the key segments you have to get to and key efficiencies you have to realize?
A: Bringing down the investment cost and material cost for each new vehicle, building this key supplier network, using digital modeling in design, etc.

Paul Eisentein from The Car Connection: Why is this restructuring plan going to work comparing to the one in 2002?
A: Bill Ford: A lot of the 2002 plan did work (goes on to list some successes). Clearly conditions have changed and I said years ago that no plan can be a static plan because things change. We have more work to do going further in these markets. The Way Forward is not a static plan, we'll be reviewing it monthly with our board and daily with each other.

Product portfolio: will you continue to make minivans?
A: We're going to have a 2007 Freestar. Our product portfolio will evolve and shift, and in some cases we'll lead the trends.

When's the earliest we'll be seeing plant closings and what will happen to the products built there?
A: St. Louis first and Wixom in the first quarter of 2007. We will share what will happen to those products built at plants which are closing when the time is appropriate.


FORD FIGHTS BACK


ADDITIONAL INFORMATION

    •    Bill Ford: “Ford Motor Company was solidly profitable in 2005 and growing around the world. The next chapter in our history will be remembered for a renewed commitment to innovation and as the time we moved boldly to prepare Ford’s North American business for global competition.”
    •    Comprehensive North American “Way Forward” plan focuses every part of the business on the customer – to build stronger Ford, Lincoln and Mercury brands, a strengthened product lineup and far greater quality, competitive costs and improved productivity.
    •    Product investments will result in new vehicles in new segments to reach more customers – including small cars and more crossovers – while maintaining Ford’s truck leadership.
    •    Ford is committed to stabilizing its U.S. market share in the near term.
    •    Competitive cost structure includes net material cost reductions of at least $6 billion by 2010.
    •    Productivity improvements leverage the company’s global product development scale and lean and flexible manufacturing system to introduce more products faster.
    •    Straightforward vehicle pricing will continue to be introduced with new models.
    •    North American capacity is realigned to match demand – with 14 manufacturing facilities to be idled – resulting in significant cost savings and reduced employment of 25,000-30,000.
    •    Salary-related costs are being cut 10 percent in North America with the previously announced reduction of the equivalent of 4,000 salaried positions by the end of the first quarter. In addition, the company’s officer ranks are being reduced 12 percent by the end of the first quarter.
    •    Ford is planning a new low-cost manufacturing site for the future.
    •    North American automotive profitability is achieved no later than 2008.
    •    Beginning in 2006, Ford Motor Company will no longer provide earnings guidance – to keep the company and investors focused on one goal: sustainable profitability over time in all regions.
DEARBORN, Mich., Jan. 23, 2006 - Ford Motor Company [NYSE: F] today announced details of a comprehensive plan to restore profitability to its automotive business in North America no later than 2008. Ford will apply lessons learned from consumers and the company’s successes around the world to strengthen its Ford, Lincoln and Mercury brands and deliver more innovative products while simultaneously reducing costs and improving quality and productivity.
“The automotive market in North America is rapidly becoming as crowded and fragmented as other global markets,” said Bill Ford, chairman and CEO. “To meet this challenge, we are acting with speed to strengthen the Ford, Lincoln and Mercury brands, deliver the innovation customers demand and create a business structure for us to compete – and win – in this era of global competition.

“We will be making painful sacrifices to protect Ford’s heritage and secure our future,” he added. “Going forward, we will be able to deliver more innovative products, better returns for our shareholders and stability in the communities where we operate.”

Ford Around the World – 2006 Outlook
For 2006, the company is expecting another year of profitability from automotive operations outside of North America . Pre-tax profits, excluding special items, are expected from automotive operations in South America , Europe (Ford of Europe and Premier Automotive Group), Asia-Pacific and Africa , and from Mazda and Associated Operations. North American automotive operations are expected to be unprofitable. Overall, Ford’s global automotive operations are expected to have pre-tax losses in 2006, while Ford Motor Credit is expected to achieve pre-tax profits.

The underlying assumptions behind this outlook include: full-year industry volumes of 17 million units in the U.S. and 17.3 million units in Europe ; industry net pricing that is expected to be down slightly in the U.S. and Europe . Also, the company’s quality performance is expected to improve, market share is expected to stabilize or improve in all regions, and cost performance is expected to be favorable. Capital expenditures of approximately $7 billion are expected during 2006, while the company expects its year-end cash balance to be more than $20 billion.

Beyond the above expectations, the company is providing no other guidance about its financial performance for 2006 – to keep employees and investors focused on one goal: sustainable profitability over time in all regions.

“We must be guided by our long-term goals of building our brands, satisfying customers, developing strong products, accelerating innovation, and, most importantly, producing a sustainable profit from our automotive business,” said Bill Ford.

Ford in North America – the Way Forward
Ford’s automotive business in North America was profitable in 2003 and 2004, thanks to the product investments and cost reductions driven by the company’s Revitalization Plan, announced in 2002.
Since that time, more and stronger competition in all segments, a faster-than-expected customer shift from traditional SUVs into other segments, significantly higher material and energy costs and other factors have resulted in lower market share and higher costs for the company.

“The team in North America , led by Mark Fields and supported by Anne Stevens, developed the plan for North America , drawing on their extensive global experience in Asia , Europe and The Americas. They have reenergized the Ford team to make it work, and they have the full support of the Ford Motor Company behind them,” said Jim Padilla, president and chief operating officer.

Fields, executive vice president and president, The Americas, calls the plan the “Way Forward.” It touches every piece of the North American business to make it more customer-focused, product-driven and efficient, including:
    •    More clarity for the Ford, Lincoln and Mercury brands – with a sharper focus on the customer and a clear point of view that will appeal to more buyers than today.
    •    A renewed commitment to design, safety and technology innovation to differentiate Ford Motor Company and its products in the marketplace.
    •    New product investments – utilizing Ford’s global architectures and scale – to deliver more new products faster, including more crossovers, hybrid vehicles, new small cars, increased spending on Ford’s truck leadership and new “white space” products.
    •    Material cost reductions of at least $6 billion by 2010.
    •    Continued straightforward pricing that is clear, credible and simple, which will further improve residual values.
    •    A lean and flexible manufacturing system combined with capacity matched to demand. Capacity will be reduced by 1.2 million units or 26 percent by 2008, representing the majority of actions within the plan’s 2006-2012 period.
    •    Plant-related employment is reduced by 25,000-30,000 people in the 2006-2012 time period, in addition to salaried personnel reductions and a reduction in the company’s officer ranks.

Stronger Ford, Lincoln and Mercury Brands
Ford kicked off the Way Forward plan in October with a comprehensive analysis of consumer attitudes and values in the U.S. automotive market. The goal was to develop a laser-like focus on different customer targets for Ford, Lincoln and Mercury to guide each brand’s design, engineering and marketing decisions.

“One of the most important findings from this research is that Americans really do want to buy American brands, as long as they are competitive with the imports,” said Fields. “We know this, because it’s already working in some segments today, such as the success of the new Ford Fusion in the import-dominated midsize car market.

“Of all the leading automakers, we believe Ford is America ’s Car Company because of where we’ve been. In terms of economic and social influence, there is no other company that’s had a greater impact on the lives of people in the U.S. and in the 20th century than Ford.”

Customers identify with Ford and its uniquely American story, the research also revealed.

“The challenge going forward is to give our customers, employees, retirees, dealers, suppliers and investors a reason to believe in Ford. That is going to be our focus,” Fields said. “Our Way Forward is not a retreat into smaller markets, but a retaking of the American marketplace. It’s time to play offense. It’s time to fight back.

“We will compete vigorously to be America ’s Car Company, winning the hearts and minds of even more customers,” he added. “We will maintain our commitment to our loyal truck customers, while delivering innovative and boldly styled cars, crossovers, SUVs and other all-new products that will appeal to people who are still inspired by the American dream.”

With that clear point of view in the marketplace, Ford is investing in new products for Ford, Lincoln and Mercury.

The investment includes moving forward with the company’s plan to offer hybrid technology on half of the company’s Ford, Mercury and Lincoln nameplates in the U.S.
Today, the company is announcing that hybrid versions of the Ford Five Hundred, Mercury Montego, Ford Edge and Lincoln MKX will debut in the 2008-2010 timeframe. The new hybrids will join the Ford Escape and Mercury Mariner hybrids, which are on sale today, as well as the Ford Fusion and Mercury Milan hybrids, which will debut in 2008. Overall, Ford Motor Company plans to build 250,000 hybrids a year by 2010.

Ford also is announcing that it will introduce new “white space” products to reach customers in new segments, and accelerate plans to bring even more crossover vehicles and new small cars to market. At the same time, the company announced that it is increasing its product investment in Ford F-Series truck leadership; increasing momentum on its blockbuster cars today, such as the Ford Fusion and Ford Mustang; introducing more design innovations – for more “at a glance” sheet metal changes – and introducing more safety innovations throughout its North American lineup.

“With more focused brands, new product investment and innovation, Ford will slow the rate of loss and then stabilize our U.S. market share in the near term, even as competitors add new models,” Fields said. “From there, we can set our sights on the future.”

TheFord Brand: In the past, the Ford brand has demonstrated a clear customer focus in many – but not all – segments. Going forward, the Ford brand will build upon the success of hits, such as the Ford F-Series, Explorer, Expedition, Mustang, Escape and Fusion, and enter new segments with a clear, consistent and distinct point of view – one driven by bold, American design and innovation. The 2007 Ford Edge, which goes on sale later this year, embodies that spirit.

“We know how to play offense and play to win,” Fields said. “Our plan will deliver more products – from small cars to our largest trucks – that are unmistakably Fords.”

Ford remains committed to maintaining leadership in full-size pickup trucks with the F-Series. The company also plans to continue its momentum in midsize cars – with all-wheel-drive and hybrid derivatives coming for the Ford Fusion – and developing new small cars and even more crossovers for the Ford brand.
 
Mercury : Ford is recommitting itself to Mercury and has developed more focused positioning that is a refinement of the work already done to revitalize the brand.

The newest Mercury products – the Milan , the Mariner and the Mariner Hybrid – are attracting younger customers to the brand and more women than Ford-brand products in the same segments, Fields said. In addition, they are bringing new customers to Ford Motor Company – at conquest rates as high as 50 percent.
“T he attraction of Mercury is modern, expressive design – one that is differentiated from Ford vehicles. Our Mercury target customer is not looking for product functionality that is substantially different from Ford vehicles. But they do have different attitudes and values, and they want a product that visually communicates that distinctiveness.

“Going forward, we will be more aggressive in appealing to these customers with clear, modern differentiation in the design of Mercurys, a unique purchase experience and marketing that is targeted, personalized and interactive ,” Fields said.

Lincoln : Ford’s vision for the Lincoln brand is to make Lincoln the reward for consumers who are living the American dream. The company sees Lincoln becoming the largest volume contributor to the Lincoln Mercury business.

“ Lincoln customers don’t need to shout about success. They are self-made people with enough confidence to be elegant and understated,” Fields said. “That understanding of the Lincoln customers will drive our brand and product decisions going forward. ”

The 2006 Lincoln Zephyr, the brand’s first entry-luxury car, and the 2007 Lincoln MKX, the brand’s first crossover, are significant first steps. Going forward, the company plans to give Lincoln vehicles an even clearer point of view through their powertrains, unique comfort and convenience features and unique designs.

“ Lincoln is about American luxury. There are many customers in this country living the American dream and who would prefer to drive America ’s luxury car. That is where we are headed ,” he added.
Straightforward Pricing: Ford is accelerating the clear-and-simple pricing strategy that began with the introduction of the Ford Fusion and Ford Mustang. Ford plans to reduce the MSRP of its products and dramatically reduce and cap rebates as it introduces new products.

“ We started introducing clear pricing two years ago. The success of Mustang and Fusion proves that it works,” Fields said. “ We will bring sticker prices more in line with actual transaction prices and cap ‘cash on the hood’ rebates as we introduce new cars and trucks into the marketplace. It will protect our margins and consumers, too, through higher resale values.”

Ford also will increase its product advertising, focusing on brand characteristics based on innovative designs, features and customer benefits.
 
Investment-Efficient Product Creation
Ford has committed to return its North American automotive business to profitability no later than 2008. Over time, the Way Forward plan should deliver profitability throughout the lineup – including new small cars – by achieving significant material cost savings as well as quality and productivity improvements.

Several new initiatives will bolster ongoing work that already is yielding significant operating improvements. Specifically:
    •    Ford will use more global vehicle architectures in North America , particularly for cars and crossovers, to reduce investment spending and improve quality.
    •    The company will share more parts and systems that are invisible to the customer, such as brakes, suspension and underbody components, across its North American, European and Asian brands to leverage its global purchasing power for lower costs and better quality.
    •    Ford will continue to implement its Global Product Development System – which is based, in part, on Mazda’s highly successful and efficient model – to reduce product development times by six to 12 months, depending on the size of the program.
    •    Ford will continue to invest in lean and flexible manufacturing, with 75 percent of its North American assembly capacity being “flexible” by the end of 2008.
Improved quality will be achieved, in part, through the “Aligned Business Framework” agreements with select strategic suppliers. The agreements are designed to strengthen collaboration and create a more sustainable business model for both Ford and its key suppliers to improve mutual profitability.
The Aligned Business Framework – coupled with Ford’s “Commodity Business Plan” process and a new single-team approach to product development and purchasing – will deliver improved quality and drive technology innovations to Ford, while lowering costs.
“We are committed to developing strong relationships with a select group of more capable, more financially stable strategic suppliers on a long-term basis,” said Anne Stevens, executive vice president and chief operating office, The Americas. “Strong suppliers and proven processes that everyone sticks to religiously go hand in hand with delivering innovation, quality and lower costs.”
Smaller, Nimbler Organization
Achieving a lean fixed-cost structure and significantly improving Ford’s North American assembly capacity utilization are critical components of the Way Forward plan.
“We’re now well past the point in which one or two hit products can correct the overcapacity we have or justify the staffing levels we maintain – even with the significant actions we’ve taken during the past couple of years,” Stevens said. “Sadly, this isn’t just a Ford issue. It’s an issue for our domestic competitors, as well.
“As hard and painful as it is to idle plants and reduce our work force, we know these sacrifices are critical to set the stage for a stronger future,” she added.
Ford is taking the following new actions to align its capacity with expected demand and to reduce fixed costs:
    •    14 manufacturing facilities will be idled and cease production by 2012, including a total of seven vehicle assembly plants.
    •    Assembly capacity will be reduced by 1.2 million units or 26 percent by the end of 2008.
    •    A new low-cost manufacturing site is planned for the future.
Ford will idle the following facilities through 2008:
    •    St. Louis Assembly
    •    Atlanta Assembly
    •    Wixom Assembly
    •    Batavia Transmission
    •    Windsor Casting (announced following CAW contract negotiations in 2005)
    •    Two additional assembly plants, which will be determined later this year
In addition, production at St. Thomas Assembly will be reduced to one shift. Facilities operated by Automotive Components Holding LLC are not included in the new announcement.
All of these actions will reduce total North American employment by 25,000-30,000 people in the 2006-2012 time period. This is in addition to the previously announced reduction of the equivalent of 4,000 salaried positions in the first quarter of 2006 – or 10 percent of salary-related costs – and a reduction in t he company’s officer ranks by 12 percent by the end of the first quarter.
Ford has briefed the leadership of the UAW and CAW about these plans.

Financial Impact
2006 will be a year of transition as Ford moves from its old North American business model to a new customer-focused strategy that is designed to restore automotive operations in the region to profitability no later than 2008. The estimated pre-tax financial impact of the North American plan in 2006 includes:
    •    $250 million for hourly personnel separations – excluding ACH actions.
    •    $220 million for fixed asset write-offs.

“Our cost structure will improve as we progress through 2006 and increasingly thereafter, and we’ll return to profitability in our North American automotive business no later than 2008,” said Don Leclair, executive vice president and chief financial officer. “We’re confident in our plan and optimistic we can achieve our goals.”

Ford begins a new era in its North American automotive business with a realistic view of the challenges facing the company but also building on several important competitive strengths, including:
    •    A corporate commitment to design, safety and technology innovation.
    •    Leadership in the full-size pickup trucks, where the Ford F-Series has been No. 1 for 29 years.
    •    A resurgent car business, paced by the Ford Mustang and Fusion, the Mercury Milan and the Lincoln Zephyr.
    •    A strong and growing presence in crossover utility vehicles, today’s fastest-growing segment.
    •    Ford Credit, which continues to be closely linked to Ford’s automotive business, delivering solid profitability.
    •    More than 4,300 Ford and Lincoln Mercury dealerships.

“Ford’s strengths were built over 100 years, and we are taking the tough but necessary steps to address our issues with candor, speed and compassion for the people affected by our work force reductions,” said Bill Ford. “This next chapter in Ford’s history will be remembered for our renewed commitment to innovation and as the time we moved boldly to prepare Ford’s North American business to face global competition.”


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    • 1 Second Ago
  • 43 Comments
      • 9 Years Ago
      Good thing you have Mazda and Volvo for oxigen FoMoCo. The Mercury brand brings nothing new but rebadged Fords. I say they should kill it someday. Lincoln at least will hold out. And I do feel sorry for all the plant closings,all 14 plants,which is sad.

      Want more profits Bill Ford? Bring the euro Focus(hint,hint) and let's see what happens.
      • 9 Years Ago
      I agree that Ford needs to re-vamp it's automotive lineup. Lincoln and Mercury seem to dilute the brand... why would the corporate identity "Ford" be on vehicles that are often positioned lowered than a similar Mercury or Lincoln model. Seems like, for instance, a Mercury Milan is a better product than a Ford Fusion. If I am consumer looking at a variety of vehicles and brands, and I see this dichotomy, it is confusing. You dont see successful brands having this sort of disparity in their product lines.

      Finally, Ford needs to establish a consistent passanger car lineup across the world, rather than completely different cars in some markets. This article makes the point about the Aussie Fords, and how Ford could do much better by offering them in the US:
      http://www.fordmuscle.com/blog/wheres-our-gentlemens-musclecar/
      Sgt. Hulka
      • 9 Years Ago
      Batavia IS on the list. This can't be a big surprise. Their CVT volumes have dropped since Job 1 and, truth be told, the plant never achieved the volumes it was designed for going back to the AXOD and CD4E trannies.
      • 9 Years Ago
      I am very glad I didnt take a job in Ford IT 9 months ago...but looking over the plan, If this is serious it could provide the turn around for Ford that it needs and possibly what GM will need to follow.

      They are cutting capacity buy 1.2 million. Moving capacity utilization from 72% where it is, towards the Japanese with thier utilization of 95-95%.

      If this works, it could provide the stabilzation of Ford that it needs, so in that I wish them luck.
      • 9 Years Ago
      So that mean's Batavia is closing? or just lowering productions really low?
      • 9 Years Ago
      I don't know anything about the auto industry except that the great lakes region has been severely affected by the downturn the past several years. I recently relocated to the middle tennesse region for a lack of descent paying work up (illinois/wisconsin border)there. The thing that does puzzle me is how the government went way out there to bail out the airlines & seems to do nothing for the auto industry.
      • 9 Years Ago
      "I'm ready to step up to the plate and do my share! Lets all Buy American!"

      I agree 100%! Thats why my next car with be a Toyota Camry with 85% US content. My current car was a Honda Accord with 80% US content.
      I wouldn't buy a Made in Mexico Ford if my life depended on it. Here is to the American worker.
      • 8 Years Ago
      DOES MCNALLY HAVE AN EMAIL ADDRESS?????
      PLEASE LET ME KNOW THANKS
      • 9 Years Ago
      From Ford's website...

      Ford will idle the following facilities through 2008:

      St. Louis Assembly
      Atlanta Assembly
      Wixom Assembly
      Batavia Transmission
      Windsor Casting (announced following CAW contract negotiations in 2005)
      Two additional assembly plants, which will be determined later this year
      In addition, production at St. Thomas Assembly will be reduced to one shift. Facilities operated by Automotive Components Holding LLC are not included in the new announcement.

      • 9 Years Ago
      The Mustang, Fusion and Edge are good starts and I welcome a family mover with some originality so I wish Ford the best. If you innovate and make good designs (note to Ford the 500 was not a good design) and price them attractively you will do well. I will buy from any manufacturer that makes the car I want. I have loyalty only to good design, performance and reliability. If Ford can do that year after year then Fords will be in my driveway year after year.
      • 9 Years Ago
      "Every automaker, including Toyota, has quality problems...everyone." - Anthony A

      23 whole posts until some hater brought up Toyota - I'm impressed.

      Nobody gives two shits about your opinion of the Camry, especially not in this thread. So what, it looks like a few other cars out there. Originality is getting hard to come by. What, if anything, does that have to do with Ford's restructuring plan? Did Billy wake up this morning and say, "golly gee, that new '07 Camry sure is ugly, so ugly that I'm going to close over a dozen plants?" Styling is subjective, and personally, I prefer my family sedans to not have the front end of a Gilette Mach 3 razor and the rump stolen from a 4th generation Prelude (not a beautiful car to begin with).

      Trying to tie your Toyota-bashing to this article with "If Ford stands behind what they are proposing, then my next purchase will be with them" is lame and uninspired. Are you trying to imply that Toyota doesn't stand behind their products? Whether you are or not, who cares?

      On topic - this restructuring program is exactly what Ford needs. It is sad that so many jobs will need to be shed, but I don't think it's Billy's fault - as said more eloquently above, he inherited a sinking ship and is taking the long, hard road to right it. Ford's NA operations will never see any money until their overreliance on SUVs comes to an end, and vehicles like the Edge are a good step in the right direction. Now if they would just bring over the Ka and the C-Max...
      • 8 Years Ago
      I've allways thought american autobuilders should look more in Europe's direction. Better efficiencies (200HP from a 2.0 engine; the handling on a Saab, Audi Quattro, etc.) Better quality (I just decided against a Ford Freestar in favor of GM's Uplander) I can't believe the price you dare ask for a stripped down, all plastic, ""Limited"" version. Better technology (while others are downing the pricetags on 6 shift gearboxes such as Audi's DSG or BMW's SMG Mustangs still come out with a prehistoric 3+1 Gearbox.
      I wish you understood why a Mercedes or a Volvo or a BMW age with style, dignity and value; while American cars age into oblivion (with very few exceptions).
      Many find no pride of ownership in an american car anymore (for generations now).
      Contrary to some opinions here, I see DC's efforts in giving some of this pride back to their products (Hemi engines; their mini-van's design; etc.).
      Fords seem over-designed mechanically, over-powered, under-efficiencied,
      Apple computer to me is a perfect example of how an American can 'think european' and own the market... do you own an iPod... yet?
      Elegance, efficiency, functionality, consumer-oriented, easy on the eye, a pride to own, a pleasure to use, older models become collector's items, excellent deals to bring even more value to customers (e.g. BMW's iPod-ready sound system, Bose's speaker add-on for iPods, etc.) all imitators are way way behind, missing the point entirely...

      it's not just about putting a hard disk on a small package with headphones... it takes so much more...

      It's not just about putting a large engine on a flashy package with wheels... it takes so much more... if you only raised your eyes and listened to the leaders in the crowd... worldwide...

      How 'bout a Sterling engine to hump up mileage two or three fold without sacrificing power? (remember the Pinto that toured the world on a Sterling?)

      How 'bout a configurable car that one can tune for mileage on workdays and power for weekends (check out what Revotechnik is doing for Audis and VWs)

      How 'bout a Ford designed and built like a VW in the sense that tolerances are strict, no apparent mold hems and defects, no screws on sight, no cheap-o seats, no detectable structure elements..

      How 'bout a Ford that'll last 10 years and still command pride of ownership, through still valid concepts, technology, construction techniques, etc.

      Stop fooling around give em all you've got, spare no ideas for next year's model, spare no advancements for next generation's litter, no holds barred...

      There really is no tomorrow
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