In just a few short days, Ford and its two cross-town rivals will be required to lay down a plan before Congress that points a clear path towards profitability and global competitiveness. These days, any automaker's future will involve plenty of greenery, and as the first of the three automakers to submit its comprehensive business plan to the lawmakers in DC, Ford's plan includes electric vehicles slated for launch starting in 2010. First up will be a new electric van for commercial use, followed in 2011 by a new electric sedan. Other highlights include U.S. versions of the European-designed automobiles that are currently making their way across the pond, the sale of all its private jets, further plant closings and continued negotiations with the UAW.
So, what kind of money are we talking? The Blue Oval's plan calls for a bridge loan of $9 billion to be made available, though it hopes it doesn't need it. You may remember that Ford bet Henry's farm already when Mulally first took office at the automaker, so it's already got a load of financed cash on hand to weather the current stormy climate through 2010. What's more, Ford hopes to get $5B of loans under the already-promised $25B for fuel efficient cars. On the negative side, the plan suggests that a bankruptcy of either General Motors or Chrysler would be enough to cripple Ford's operations. Barring that, even with a forecast of flat sales of 12.5 million units per year for the next three years for the U.S. auto industry, Ford believes it's on its way back to profitability as early as 2011.
For the entire month of December, Ford's plant in St. Paul, Minnesota, where about 1,000 workers assemble the Ford Ranger, will shut down. According to reports, it is normal for the plant to be closed for the week of Christmas, but an additional three weeks of downtime is necessary to "align production with demand." The plant had initially been scheduled to be shuttered sometime in 2008, but the recent upwards trend in small pickup sales prompted the Blue Oval to keep it open a bit longer and it currently has no specific date set for closure, though it's demise is currently rumored for sometime in 2011. Perhaps if Ford would actually do something to update its long-in-the-tooth Ranger truck, it wouldn't need to consider its death at all, but that's another story entirely.
Over 2006 and 2007, Ford lost $15.3 billion. Over that same time and in light of those losses, the company also shed 33,600 union workers through buyouts and early retirement. Still working through the uphill part of the turnaround, Ford has announced it wants to eliminate another 8,000 to 9,000 factory jobs through buyouts. If 8,000 workers end up leaving, that's almost 12 percent of Ford's current workforce walking out the door. They'll leave with benefits and a buyout that ranges from $50,000 to $70,000 depending on whether the position is a skilled trade. While it might seem like a lot of money, the point is that with the new labor agreement, Ford can hire new workers -- when the time comes -- for $26 to $31, instead of the $60-per-hour it pays now. The UAW figures the salary change could save Ford $1,000 per car.
Although 8,000 buyouts is Ford's target, the company is willing to accept more workers leaving. The offer has been extended to workers at four shuttered factories, and will be expanded next week to others. Those who don't want buyouts can be transferred to another factory. And if they don't accept the buyout or relocation, then they "will be placed on a 'no-pay, no-benefit leave,'" which sounds a lot less appealing than a 5-figure check.
