Ford to Cut 12,000 Jobs; Chrysler Plans Own Cuts
By JOSEPH B. WHITE and NORIHIKO SHIROUZU
Staff Reporters of THE WALL STREET JOURNAL
Ford Motor Co. is planning to eliminate a total of about 12,000 jobs world-wide, while DaimlerChrysler AG's Chrysler unit is readying its own plans to cut several thousand jobs in the latest fallout from the intense competitive pressure on Detroit's auto makers.
The cutbacks at the No. 2 and No. 4 auto makers come as the ink is barely dry on new master labor agreements with the United Auto Workers. The UAW agreements will allow Detroit's Big Three to eliminate as many as 50,000 jobs through a combination of buyouts and normal attrition over the next four years, analysts have estimated. But Ford and Chrysler, which are both in the midst of difficult restructuring programs, are signaling they want to accelerate the pace of cost cutting heading into next year.
As part of its contract with the UAW, Ford also secured the UAW's agreement to allow it to shut down four U.S. factories, sell or close a fifth, and reduce employment at others. In addition, Ford will close a Canadian truck assembly plant. About 5,000 jobs in total will be struck off the Ford payroll as a result. UAW-Ford employees ratified the contract yesterday.
Chrysler to Offer Early Retirement
Separately, Chrysler is preparing to offer early retirement packages to thousands of U.S. workers under provisions of its just-ratified four-year UAW contract.
Chrysler and the UAW are forming a task force to discuss how to offer voluntary buyouts to UAW skilled trades workers at the company's U.S. plants. The task force is expected to be in place by Nov. 1, but it will take a few months to decide how buyouts will be offered, a company spokesman said. The Detroit News reported Tuesday that Chrysler will seek to move as many as 5,000 skilled trades workers off the payroll with buyouts. Chrysler didn't confirm that figure Tuesday. Chrysler is offering buyouts to workers at several parts factories it plans to close.
Chrysler told the UAW during contract talks that it wanted to close or sell as many as nine U.S. factories. Chrysler also is pushing hard to close the gap between its North American manufacturing productivity and that of rivals GM and Toyota Motor Corp. As productivity improves, Chrysler's current 60,000 hourly work force will shrink unless the auto maker can reverse its recent market share losses.
GM, meanwhile, is still awaiting contract ratification from its UAW employees. But the company and the UAW have disclosed an agreement to close a plant in Baltimore at the cost of about 1,100 jobs. More significant for GM is the flexibility the new agreement allows for GM to cut its work force by attrition as it improves productivity. About half of GM's active UAW work force of 118,000 members will be eligible to retire in the next five years. GM last year improved manufacturing productivity in North America by 7.4%. |
