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Ford Workers Anxious as Firm Plans to Cut Jobs, Drop Products
Ford Ranger pickup trucks at a dealership in Detroit. The company is set to announce a downsizing plan Monday, which analysts believe will include job losses, plant closings and product-line cuts.
(By George Waldman -- Bloomberg News)
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GM carries substantial "legacy" expenses -- the pensions and health care costs of more than 750,000 employees, retirees and dependents. But with Ford, analysts are questioning the company's market instincts.
The company has had spotty success with new vehicles. The retooled Mustang, introduced last year, has sold well, but a large sedan called the 500 -- thought of as a replacement for the popular Taurus -- flopped.
"The real sad thing about Ford is that we've seen their best shot," said Peter Morici, economist and professor at the University of Maryland's Robert H. Smith School of Business. "One can reasonably conclude that Bill Ford does not know how to build cars that people want to buy. On his watch, Ford will have redone his entire line and failed to accomplish success."
David B. Healy, an auto analyst at Burnham Securities Inc., expects Ford to report an operating loss of $950 million in the fourth quarter in its core North American division. In the first nine months of last year, Ford reported a pre-tax loss of $2.1 billion in the division.
Company-wide, however, Ford is expected to report a profit of nearly $2 billion, as losses in the North American division are offset by gains at Ford's finance division and profits from operations in other parts of the world.
Ford employees said the past few weeks have been difficult. Many received e-mails just before Thanksgiving saying the company would make a restructuring announcement in January that would include job reductions.
Callahan, the Ford employee in Minnesota, understands the tough economics his truck plant faces.
"Ranger pickups are not a high-profit vehicle. We're one of the oldest plants in the U.S., and we're sitting on valuable riverfront property" along the Mississippi River, he said. On Monday, Callahan said, he and other plant workers will be watching the announcement at the plant on closed-circuit television.
