Ford to close plants, cut jobs

Ford Motor Co plans to cut 35,000 jobs, close five factories by the end of the decade, and eliminate four vehicle models as the second-largest automaker seeks to reduce expenses and eliminate losses. Ford said 22,000 of the job cuts, including 12,000 manufacturing jobs, would take place in North America.

The automaker will report costs of $4.1 billion for fourth-quarter 2001 for the restructuring designed to cut annual capacity from 5.7 million vehicles to 4.8 million, William Clay Ford Jr, chief executive officer, said. Ford said he would forgo his salary this year and only be paid in stock options.

The changes will cut costs by about $1 billion this year, said Nick Scheele, chief operating officer.

Assembly plants in Edison NJ; Hazelwood MO; and Oakville, Ontario, Canada will stop making vehicles over the next few years, the company said.

Ford will also close a casting plant near Cleveland OH that makes engine parts, while a fifth plant in Avon Lake OH — also near Cleveland — will close temporarily and eventually receive a new product to build, the company said.

Ford's union contracts prevent the automaker from immediately shutting plants. The company's contract with the United Auto Workers (UAW), which expires in 2003 and covers United States production workers, prohibits plant closings although factories can be idled with workers receiving 95% of their pay.

Ford's contract with the Canadian Auto Workers (CAW) requires a one-year notice of a plant closing.

The 1,400-employee Ontario Truck Assembly plant in Oakville, Ontario, is one of four North American factories that make the F-150 light truck. The plant has only one production shift and CAW officials have tried unsuccessfully to get Ford to build an additional product there.

Edison Assembly in New Jersey, with about 1,660 workers, produces the Ranger compact truck. Ford has already said it will lay off 630 people and shut down one of two production shifts in February 2002. The company's St Paul, MN plant also produces the Ranger.

Ohio Assembly in Avon Lake produces Econoline and Club Wagon bodies and Mercury Villager and Nissan Quest minivans. Sales of Econoline vans fell 17% in 2001, sales of Villager declined 28%, and Nissan Quest sales fell 32%. The plant has about 2,700 employees, including 260 on indefinite layoff since the end of 2000.

St Louis Assembly in Hazelwood produces the Ford Explorer SUV. The plant employs about 2,600 people, but Ford has a 3,800-employee plant in Louisville that also makes the Explorer.

Vehicles to be dropped are the Ford Escort, Mercury Cougar, Mercury Villager, and Lincoln Continental.

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