Ford Cuts Jobs, Restructures North American Operations

Filed in archive Economy on January 23, 2006

In a move sending ripples through the corporate world ford Motor Company announced that it will cut 25,000 to 30,000 jobs and idle 14 facilities by 2012 as part of a restructuring proposes to reverse a $1.6 billion loss last year in its North American operations.

Ant and Sons reports that, "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."

Bill Ford, Chairman and Chief Executive made this statement, "these cuts are a painful last resort, and I'm deeply mindful of their impact. In the long run we will create far more stable and secure jobs. We all have to change and we all have to sacrifice, but I believe this is the path to winning."

Evidently one of the byproducts of this announcement is that Ford no longer going to offer future financial guidance. It is expected that many will few this as a negative but some like it.

Chad Brand has the perspective that even if the guidance is dropped because Ford has no idea how their finances will look, or have no confidence that they will be able to attain the objectives they set, it is still a positive move in general. He says this:

"Companies should join Ford and realize that it's too difficult and unproductive to accurately predict future profits, especially if you are managing a business for long-term success, not to simply meet investors' short-term goals."

"Wall Street might not like it, but now Ford could be better able to make the right decisions to get back on track. This is not an endorsement of the stock, as I have not looked closely at it, just a pat on the back for getting rid of guidance that benefits nobody except the research analysts who rely on it to do the bulk of their jobs."

For a detailed report go here