Ford takes an ax to itself.

In a strange way the news that Ford is about to downsize in a major way makes me feel a bit better that I got laid off last year…

DETROIT – Ford Motor Co., the nation’s second-largest automaker, said Monday that it will cut 25,000 to 30,000 jobs and idle 14 facilities by 2012 as part of a restructuring designed to reverse a $1.6 billion loss last year in its North American operations.

The cuts represent 20 percent to 25 percent of Ford’s North American work force of 122,000 people. Ford has approximately 87,000 hourly workers and 35,000 salaried workers in the region.

Earlier Monday, Ford reported earnings of $2 billion in 2005, down 42 percent from last year’s profit of $3.5 billion. It was the third straight year the automaker has reported a profit, but gains in Europe, Asia and elsewhere were offset by a loss of $1.6 billion in North American operations.

That’s a lot of folks out of work, many of whom will be here in Michigan and that can’t be good for any hopes of turning this state’s economy around. The fact that it’ll be happening over the next 6 years will help spread out the pain, but Michigan’s Wixom assembly plant is due to be shut down by 2008. I drive by that plant on my way into work every morning now that we’ve moved out to Brighton.

I’m no big fan of Ford’s products and my experience working for the company didn’t give me a lot of reason to change my mind after seeing the decision making process used at the company, but I have a lot of friends that work for Ford so I have no big desire to see the company go belly up anytime soon. Here’s hoping most of them manage to avoid being laid off like I was.

4 thoughts on “Ford takes an ax to itself.

  1. Hopefully all your friends at Ford will take the opportunity to find other employment. The hard lesson is that there is no such thing as job security (as you were painfully made aware); only people who manage their careers are the ones who do well.

    Sticking around means more uncertainty, harder work (someone has to make up for the people who got the axe), eventual less output (suspending works at 14 facilities!?), leading to more layoffs, etc.

    When a ship takes on water, you bolt if you’re one of the galley slaves. The captain goes down with his ship.

  2. Actually, that’s an antiquated approach.

    Nowadays, they bolt the galley slaves into the hold, and give the captain a ride in the multimillion dollar cruiser, the “SS Buyout”.

    Can you say “jacques ass?”

  3. Being in Grand Rapids, I am not sure how hard it’s going to be hitting us on this side of the state. I know when I lived in Lansing it was awful. I had GM employees coming in all the time talking about lay offs and plant closings.

    Through a temp service, I worked at Grand Rapids Spring, which manufactured parts for Ford. When a Ford or GM plant is closed it hurts these plants that supply parts as well. So, not only will 30,000 or so people from Ford be out of work, but their suppliers will be screwed as well.

    Telling someone to get a job is not always that easy. Most of these people that will be getting “laid off” are parents. A minimum wage job at McDonalds isn’t going to cut it. And that’s IF there is even a job opening at McDonalds. They’d rather hire high school/college kids that they can pay a crappy wage, work em part time and give no benefits.

    Our country is being hit hard by the loss of manufacturing jobs and our government really isn’t providing any good answers that I can see. Bush keeps on talking about how low unemployment is, but seems to forget, you can only collect for so long. And that the majority of jobs that are being created are in the service industry. It’s hard enough raising a family these days on a manufacturing salary… try doing it on a McDonalds style salary and it’s near impossible.

  4. Ford will receiving a major tax break under the American Jobs Creation Act of 2004.

    By conducting some fancy numbers shuffling, Ford will actually be able to terminate 30,000 employees while receiving money from the government set aside for jobs creation.

    According to this Newsweek article, a loophole arises in the AJCA when a company repatriates a portion of it’s earnings while simultaneously cutting jobs.  Nice.

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