• May 28, 2008

Perhaps 'fired' is the wrong word, as that does imply that these white collar workers did something wrong. The only thing some 12% of Ford's salaried workforce did wrong is get hired by a company that dug itself into a hole relying on strong truck and SUV sales during the 1990s. Now, with consumers avoiding gas-hungry vehicles, the restructuring effort faltering amidst high gas prices, and news that the company has abandoned its goal of returning to profitability in 2009... cutting more salaried workers was inevitable.

Ford CEO Alan Mulally told reporters last week that sales of big trucks and SUVs crashed once gas hit $3.50 per gallon. In April, full-sized pickups accounted for 11 percent of sales. By the second week of May, the number had fallen to just 9 percent. "I don't think we've ever seen a decline week over week like this," Mulally said. "It was clear to us it was time to act." And act they did. While details have not been finalized, Ford expects to eliminate up to 12 percent of its salaried work force (with about 24,300 white-collar workers in the States, this means more than 2,000 positions will be gone). Ford Vice President Jim Farley couldn't sugar-coat the news, but he did try to spread the doom around when he spoke to his employees on Friday, saying "I would expect other car companies to make similar announcements... they have the same issues that we do -- even Toyota."

[Source: The Detroit News]



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  • 39 Comments
      • 6 Years Ago
      Anyone want to wager that gasoline prices in the US will stabalize after the November election? Especially if the republicans are not elected? OPEC countries are no friends of the current administration....

      Hmmm, one has to wonder.
      • 6 Years Ago
      Keep the workers, lay off the 30 Vice presidents, CEO, CFO, and COO. The workers didn't do anything wrong. The blame shoudl go to the top and they should lose their jobs and pensions.

      That isn't going to happen though. Just like GM isn't going to cut the $multibillion pension plan for thier millionare executives. The executive pension plans at Ford and GM both allocate more money for executive pensions than all other employess combined.

      By the way gas prices are being controlled right now by a few billionare investors purposely running the price up to derail the American economy and send the dollar straight to equity with the Chinese Yuan in order to turn America into a cheap labor market supplied by Central American immigrants. This is so they can prevent the Chinese economy from actually growing to a point where the Chinese can effectively control global politics.

      There is not a single supply and demand model that can be made to justify oil at $130 a barrel right now. Any American with the ability needs to move to Europe as soon as possible because the Age of America is over.
      • 6 Years Ago
      My suggestion to rest of the 88% of employees is that try and find a job in non-automotive industry, if you can't, try and find a job in non-US auto company. Move out as fast as you can.

      ---

      What US auto companies need is game changing tech that is not reliant on oil, they don't have it. There is no way they can make more fuel efficent vehicles simply becuase their focus is somewhere else (f150, silverdao, flex, challenger, camaro, mutang etc..). There are no tricks left up their sleeves.




        • 6 Years Ago
        You've never been to to SE Michigan, have you.
        Can't get a non-auto job- Jenny is only creating 3 at a time. Can't leave, because you can't sell your house.
      • 6 Years Ago
      As a share holder, I am pleased to see Ford react so quickly. Yes, you can say they should have seen this coming - and they did: they have a whole new lineup of small cars coming - they just didn't see it soon enough. Unlike GM and Chrysler, Ford isn't sitting on their hands hoping it gets better, they are taking action now to cut costs to keep on their profit goals.

      Some of you mentioned Wal-Mart. This is exactly how Wal-Mart handles it. If sales are below plan, each store is ordered to cut expenses, whether its in office supplies or payroll or whatever. It is nice to see Ford doing the same.
        • 6 Years Ago
        This comment is exactly why there shouldn't be common traded stock.

        "as a shareholder I am glad they are acting so quickly" to boost the bottom line so the damage to the share price won't be as bad. In fact his news will probably send the share price higher and I will get a greater cut of the dividend, yay!

        Meanwhile in the real world a few thousand people are losing thier jobs in a market where it will be virtually impossible to get a new job with the same salary and benefits. These layoffs are also happening in areas with the highest forclosure rates in the nation. So with these layoffs you can expect another few thousand homes to come available in already depressed areas further adding to the overall decline.

        But that isn't important, just the share price. maybe they should fire all American workers and move all production to China. That would really help the bottom line and that share price.

        • 6 Years Ago
        To M:

        I think the workers should be first too, and it's definitely best when a company is able to do this. But it's much harder now. Ford used to put its workers first too, even before union labor. But with Toyota and Honda and Nissan all using nonunion labor and making huge profits, Ford has a lot of trouble doing this.

        Same with Walmart. Crappy as it is, Walmart is using sweatshop Chinese labor to compete with all the other companies using sweatshop labor; if Americans were willing to pay more for American labor, they'd get it, and there's a good chance there would be at least one company (if not Walmart, then someone else) that would put their workers first. Americans aren't willing to pay more for American labor, though, the bottom line on their products is the only thing that matters to them.

        Try convincing our culture to pay more for American-made products. Even if they're both the same quality, if one is cheaper than the other, Americans will buy the cheaper product regardless of where it's made. It's just basic capitalism.
        • 6 Years Ago
        "This is exactly how Wal-Mart handles it. If sales are below plan, each store is ordered to cut expenses, whether its in office supplies or payroll or whatever."

        I'll speak for (or against) Wal-Mart in this case. When Sam Walton was alive, Wal-Mart didn't have these kinds of problems and still the company grew and prospered on a staggering scale. But Sam did one thing Ford's exec aren't doing. Sam put his employees first. They were his biggest asset, and he openly said so AND PROVED IT by the way he ran his company. Of course that's all changed and indeed Wal-Mart and Ford as just alike now. Profits come before anything or anyone(!).
      • 6 Years Ago
      Instead of laying off thousands of people and potentailly ruin their lives, why don';t those greedy execs take a paycut or shave off some of there bonuses?
        • 6 Years Ago
        Good point. I'll always remember Iacocca doing just that when Chrysler was in the toilet in the early 80s. He took home a salary of only $1 to show his support of those Chrysler employees who had to cut-back. Yes, I know he had stock options, pension, benefits, savings, etc. that would choke a horse. But it was a cool gesture that Ford's exec could (should) mimic. But greed has no limits and some higher up on the totem pole would no doubt declare, 'Let 'em eat cake' than suffer any loss of income even if it meant they'd be helping their company.
      • 6 Years Ago
      Gas in New Zealand is $2.09 a liter. $7.90 a gallon. Smaller slower moving economy there.
      • 6 Years Ago
      +1 on the oil cost statement.

      Currently oil is being driven by the speculators who are buying it up and not releasing it for sale. They are buying the surplus which is driving up demand. Several years ago speculative investors were only invested in something like 6% oil in their portfolios...now it's something like 28%. There are a growing number of analysts who think the oil price market is a bubble like the real estate. The only thing driving it is the speculators themselves, and India, China and the US are all getting the oil they need. I will laugh if that bubble bursts and the speculators lose their butts.

      It's sad to see a company have to lay off anyone, but ultimately with more players in the market, your market share will inevitably decline, reducing your workforce needs. Chrysler has the right idea currently by setting a target for individual model sales, and adjusting their resources (plants, manpower, etc) accordingly.
      • 6 Years Ago
      Ford should try a different strategy.....

      Take a look at this first generation grass roots alternative. It shows some real promise!

      http://zeropollutionmotors.us/
        • 6 Years Ago
        "Dude, stop promoting your air car site. Once was enough."
        LOL

        • 6 Years Ago
        It is not my site, just a simple but ingenious solution with a great amount of true engineering involved. What better alternatives do you have? Better to be the first on board with future solutions for the world market. Maybe we could have an auto industry that is not laying off folks!
        • 6 Years Ago
        Dude, stop promoting your air car site. Once was enough.
      • 6 Years Ago
      OK, I will tell Ford execs right now that gas prices will hit $7 by or before 2011.

      If they act surprised at that time, they need to be fired and fined last 5 years of their salary.

        • 6 Years Ago
        'Someone somewhere is determined that we - in the U.S. - are going to pay the same prices for gasoline as the Europeans.'

        Well this was mentioned by quite a few people way back when we were voting two oil men into the White House. At the time I thought those people were just being cynical. Seems they were right. What was teh price of a barrel of oil in 2000? I'm not one for conspiracy theories but this sandwhich has some meat in it.
        • 6 Years Ago
        Thats too funny. You go teach them Ford execs. LOL.
        • 6 Years Ago
        Gregg. Thank you for the lesson in semantics. Now, I will trod off to educate myself on “the issues”, whatever those issues are. Perhaps you could simply enlighten me with your powerful intellect and deep understanding off the universe. I bow at the high alter of your awesome cognitive might.
        • 6 Years Ago
        For the past few years several people have been urging FoMoCo and the other Big 2.5 to build full plug-in, series electric, BioDiesel Hybrids that get better upwards of 100 mpg. If they did just that, they would now be positioned to make a lot of money in the era of $7 fuel.

        And, keep in mind that each of these companies built such cars nearly 15 years ago under the DOE's Program for a New Generation of Vehicles (PNGV).

        While these companies deserve to go under (and I am a stock holder) it is very sad that so many good people will loose everything they have worked for over the years.
        • 6 Years Ago
        I'll bet money that gas prices will have reached $7 / gallon before 2011. We'll be inching towards $8 / gallon by then. Someone somewhere is determined that we - in the U.S. - are going to pay the same prices for gasoline as the Europeans. By the way, does anyone know how much gas costs in Japan and in Austrailia?
        • 6 Years Ago
        My theory, dinger, is you would rather have dubious ideas--which you call theories (maybe you meant hypothesis or hunch?)--than to simply educate yourself about the issues. BTW a theory is an explanation that has passed every objective test to which it has been subjected.
      • 6 Years Ago
      You know what I think these 24000 people plus the other 45000 that were let go last year should do? They should all come together, pool their resources and start a new car company. They have the talent. Among these 69000 people are engineers, marketing, management, line workers, welders, benders, and everything else that you need. 69000 people walking into a bank and each getting a loan for 20000 grand is 13.8 billion. Thats more than enough to buy some idled plants for dirt cheap and make cars and have their own company. When they make a profit, share the money around.
        • 6 Years Ago
        I understand what you are saying but my point is talent is not enough to get a car on the road. There is a sh#t load of legal work that required ($$$) to get a mass production car on the road. Also to produce a car that any where near affordable (sub 20K range) you need a factory and good assembly plant so more money. advertisings, marketing and all other department which require huge amount of budgets to run. I am not sure people being laid off in Detroit have that kind of money.

        It would better idea if people being laid off spent their resources starting new companies that does contract work for larger companies using union free labor.
        • 6 Years Ago
        Do you really think that the people who got LET GO from Ford are the right people to start a new car company? These are the people that weren't sufficiently talented enough to work for a struggling company...
        • 6 Years Ago
        Brilliant idea my friend, but 20,000 grand? if i do my arithmetic right... and... carry the one... thats 20,000,000. (ala Dr. Evil) A lot for an unemployed person to borrow. maybe they can put their town up as collateral.
        • 6 Years Ago
        do you have any idea what kind of certifications ($$$$$/lobbying) are required to get a car roadworthy in America? there is a reason why there are only less 10 major car companies here.
      • 6 Years Ago
      Best pic in autoblog ever!
        • 6 Years Ago
        since autoblog is obviously not familiar with the practice or term, it is called lay-offs and happens frequently in the world and I expect as a result of the economy will be happening more.

        • 6 Years Ago
        I lol'ed. The door. Let me show you it. :D
        • 6 Years Ago
        I know, right! That pic is classic!
      • 6 Years Ago
      Like Toyota's downturn can hold a candle to how Ford squandered its lead, going from a company poised to pass GM in sales to one with too few relevant products, a many years long sales skid showing no signs of let up, and a totally mortgaged "future." The Ford brass, Mullaly included, still only have half a clue. Still, that's better than when Bill Ford ran the company (into the ground).
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