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Friday, 11 January, 2002, 20:09 GMT
Ford chief announces 'painful' changes
Lincoln Town Car
The Town Car is one of many new models expected
David Schepp

Delivering on his forecast of tough times ahead, Ford chief executive William C Ford Jr has said he intends to cut jobs, eliminate products and close plants across North America in order to bring profitability back to the world's second largest car maker.

We've made some progress already but we're not finished

Bill Ford, Ford Motor CEO
Saying his company "cannot cost cut our way to a product-led recovery", Mr Ford delivered on Wall Street expectations to eliminate 20,000 jobs and close five assembly plants, with 11 more targeted for restructuring.

It was tough talk from the until now genteel sounding Mr Ford, who in the past worked his influence in the company through "green" initiatives, such as increasing the fuel economy of Ford's line of sport-utility vehicles (SUVs) by 25%.

But even as he sounded a clarion call to boost quality, "right-size" production facilities and cut costs, Mr Ford spoke of differentiating his company from the competition by using innovative technologies that would be "acceptable not only to our customers but also society."

Long time coming

Mr Ford's announcement, made at Ford headquarters in Dearborn, Michigan, was of little surprise to analysts, auto enthusiasts and Ford employees, who expected further job cuts and plant closings.

Ford CEO William C Ford
Ford: "We haven't come to these decisions quietly or easily."
Earlier in the week, at the North American International Auto Show, Mr Ford said the company was in the middle of a painful transformation.

"We've made some progress already but we're not finished," Mr Ford said on Sunday evening.

It was Ford chief operating officer Nick Scheele, however, who laid out the details of the restructuring, telling analysts and employees, watching via satellite television, the specifics of which plants were to be closed, as well as how many employees would lose jobs.

Painful cuts

Mr Ford's job was to set the stage, and in doing so he noted no less than four times that the cuts Ford's board of directors had approved would be "aggressive" and "painful".

In making sweeping cuts in jobs, products and plants across North America, the youthful chief executive, who has held his post for 10 weeks, has made it clear the pain he spoke of will be shared among all aspects of the company - including himself.

"I've asked the board to pay no salary, bonus or long-term compensation except for options," Mr Ford said, adding that "if the company succeeds, I will do well.

Jaguars on display in Detroit
Ford's Premier Automotive Group is highly profitable
Numerous times he referred to Ford's employees as family and conveyed concern over what the job losses and plant closures might mean for workers and their communities.

Moving forward

As part of his vision to reduce costs, boost quality and reconfigure plants, Mr Ford described a plan that gets "back to basics".

"It means we're going to provide the highest level of quality and value to our customers - and those are timeless fundamentals," he said.

Ford has suffered in recent years from quality woes as well as an expensive tyre recall campaign for its Explorer SUV, causing the auto maker to sever its near-100 year long relationship with tyre-maker Firestone.

Mr Ford acknowledged that his firm had lost its way in recent years and was busy patching damaged relationships with its employees and suppliers.

With Mr Ford's plan for his company's future finally made, what remains is the reaction by Ford employees.

Ford Motor's contract with the United Auto Workers (UAW) is in force until September 2003, and provisions within the pact prohibit plant closings.

A bitter fight over job cuts and factory closures is the last thing the beleaguered auto maker - and its new CEO - needs.

See also:

11 Jan 02 | Business
Ford hit by 'perfect storm' of woes
11 Jan 02 | Business
Ford takes job cuts to 35,000
05 Dec 01 | Business
Ford warns of steep losses
03 Dec 01 | Business
Ford cuts more jobs as sales flag
17 Oct 01 | Business
Ford reports huge loss
11 Jan 02 | Business
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