Ford Motor Co. said Monday it plans to close 14 manufacturing plants in North America and cut between 25,000 to 30,000 jobs in the coming years as tries to stem it losses and adjust to its new, significantly lower market share.
The nation's No. 2 automaker said that it will close three U.S. assembly plants -- in St. Louis, Wixom, Mich., and Atlanta -- as well as two other assembly plants yet to be determined. The other plants to be closed are powertrain and stamping plants. The cuts will trim its North American capacity by more than a quarter.
The cuts represent about 18 to 21 percent of the employees in its North American auto operations. The closing will cut even deeper into U.S. hourly employment of 82,000, though the exact percentage is not yet known.
But the cuts won't come immediately. Some will not take effect until 2012, and many will be accomplished through attrition and retirement. Ford has a contract with the United Auto Workers union that runs through September 2007 requiring laid-off employees to be paid nearly their full pay.
Chairman and CEO Bill Ford said that the cuts would be painful but are necessary in order to respond to customer demands. He admitted that Ford had been hurt by the customer shift away from the large size SUVs, leaving Ford with too much capacity of the large, less fuel efficient vehicles.
"If we build it, they'll buy it. That's business as usual and it's wrong," Ford said. "Our product plans for too long have been defined by our capacity. That's why we must reduce capacity in North America."
The St. Louis plant, with about 1,500 employees, makes the Ford Explorer and its Mercury twin, the Mountaineer.
The other two plants identified for closing are the Wixom plant, which has about 1,600 employees and makes the Lincoln LS and Lincoln Town Car, as well as the Ford GT, and the Atlanta plant, with about 2,000 employees, that makes the Taurus.