Ford to close factories and cut jobs

Ford Motor Co. said today it would cut 35,000 jobs, close five factories by the end of the decade and eliminate four vehicles 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 the fourth quarter of 2001 for the restructuring

Ford Motor Co. said today it would cut 35,000 jobs, close five factories by the end of the decade and eliminate four vehicles 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 the fourth quarter of 2001 for the restructuring designed to cut annual capacity from 5.7 million vehicles to 4.8 million, CEO William Clay Ford Jr. said at a press conference. 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 COO Nick Scheele.

Assembly plants in Edison, NJ, Oakville, Ontario, and Hazelwood, MO, will stop making vehicles over the next few years, the company said. Ford will also close a casting plant near Cleveland 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 shuttering the plants. The company's contract with the United Auto Workers (UAW), which expires in 2003 and covers U.S. 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 which makes the F-150 light truck. The plant has only one production shift and CAW officials, who have said the factory was vulnerable to being closed, 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 next month. The company's St. Paul, MN plant also produces the Ranger.

Ohio Assembly in Avon Lake, Ohio, produces Econoline and Club Wagon bodies and Mercury Villager and Nissan Quest minivans. Sales of Econoline vans fell 17% last year, 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 also 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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