Bloomberg
Ford Motor Co.’s finance unit said it is eliminating 1,000 jobs this year, a 20 percent reduction, after the automaker announced plans last week to cut 900 positions at a Mustang factory amid weak demand.
Ford Motor Credit Co., which provides loans to car buyers and dealers, told employees yesterday about the job losses, a spokeswoman, Margaret Mellott, said today in an interview. Ford Credit plans to get rid of most of the jobs by March 31, trimming U.S. employment to 4,000, Mellott said.
Dropping the 1,900 jobs shows Chief Executive Officer Alan Mulally is still chopping the payroll even after Ford avoided bankruptcy last year and slashed the number of North American workers by 47 percent since 2006. Ford’s share of U.S. auto sales slid to 16.1 percent last year from 25 percent in 1998.
“Ford is going to be in restructuring mode for a long time, even after the business gets better,” said Joe Phillippi, president of AutoTrends Consulting in Short Hills, New Jersey. “Mulally’s charge to the troops is to keep the pressure on relative to the efficiency of human resources.”
Ford, which still has 600 U.S. employees on indefinite layoff, said Feb. 16 it will redeploy most workers losing their jobs when the Mustang plant in Flat Rock, Michigan, goes to one shift in July. Sales of the sports car fell 27 percent in 2009, topping the 15 percent drop for Dearborn, Michigan-based Ford.
No Hiring
The second-largest U.S. automaker said it has no plans to hire workers even as it spends $1.6 billion retooling domestic factories to make more fuel-efficient models like the Focus small car.
Ford rose 13 cents, or 1.1 percent, to $11.73 at 4 p.m. in New York Stock Exchange composite trading. The shares have climbed 17 percent this year after surging more than fourfold in 2009.
Ford Credit’s job eliminations will come at business centers and collection centers in seven states, Mellott said. While some of the positions will be eliminated with retirements and attrition, most will be involuntary dismissals, she said.
“This is an effort to meet current and projected business conditions,” Mellott said. “Auto industry and Ford sales are down, and we are continuing to transition out of Jaguar, Land Rover, Mazda and Volvo financing business. Our focus is on supporting Ford Motor Co. brands of Ford, Lincoln and Mercury.”
Mulally is selling off the foreign luxury units to focus on Ford’s namesake brand. Dearborn, Michigan-based Ford posted 2009 net income of $2.7 billion to end three years of losses. Ford Credit had net income of $1.3 billion, compared with a $1.5 billion loss in 2008.
Shrinking Ford to reflect its current market share would make the automaker much more profitable when demand recovers, Phillippi said. Ford gained U.S. market share last year for the first time since 1995 on redesigned models such as the Fusion and Taurus sedans.
“If you can get your staffing levels down to a 16 percent share and still manage to deliver good products, you could make a hell of a lot of money when you start to grow,” Phillippi said. “This company is not afraid to skinny down to the point where people are stretched.”
Ford Motor Credit Co., which provides loans to car buyers and dealers, told employees yesterday about the job losses, a spokeswoman, Margaret Mellott, said today in an interview. Ford Credit plans to get rid of most of the jobs by March 31, trimming U.S. employment to 4,000, Mellott said.
Dropping the 1,900 jobs shows Chief Executive Officer Alan Mulally is still chopping the payroll even after Ford avoided bankruptcy last year and slashed the number of North American workers by 47 percent since 2006. Ford’s share of U.S. auto sales slid to 16.1 percent last year from 25 percent in 1998.
“Ford is going to be in restructuring mode for a long time, even after the business gets better,” said Joe Phillippi, president of AutoTrends Consulting in Short Hills, New Jersey. “Mulally’s charge to the troops is to keep the pressure on relative to the efficiency of human resources.”
Ford, which still has 600 U.S. employees on indefinite layoff, said Feb. 16 it will redeploy most workers losing their jobs when the Mustang plant in Flat Rock, Michigan, goes to one shift in July. Sales of the sports car fell 27 percent in 2009, topping the 15 percent drop for Dearborn, Michigan-based Ford.
No Hiring
The second-largest U.S. automaker said it has no plans to hire workers even as it spends $1.6 billion retooling domestic factories to make more fuel-efficient models like the Focus small car.
Ford rose 13 cents, or 1.1 percent, to $11.73 at 4 p.m. in New York Stock Exchange composite trading. The shares have climbed 17 percent this year after surging more than fourfold in 2009.
Ford Credit’s job eliminations will come at business centers and collection centers in seven states, Mellott said. While some of the positions will be eliminated with retirements and attrition, most will be involuntary dismissals, she said.
“This is an effort to meet current and projected business conditions,” Mellott said. “Auto industry and Ford sales are down, and we are continuing to transition out of Jaguar, Land Rover, Mazda and Volvo financing business. Our focus is on supporting Ford Motor Co. brands of Ford, Lincoln and Mercury.”
Mulally is selling off the foreign luxury units to focus on Ford’s namesake brand. Dearborn, Michigan-based Ford posted 2009 net income of $2.7 billion to end three years of losses. Ford Credit had net income of $1.3 billion, compared with a $1.5 billion loss in 2008.
Shrinking Ford to reflect its current market share would make the automaker much more profitable when demand recovers, Phillippi said. Ford gained U.S. market share last year for the first time since 1995 on redesigned models such as the Fusion and Taurus sedans.
“If you can get your staffing levels down to a 16 percent share and still manage to deliver good products, you could make a hell of a lot of money when you start to grow,” Phillippi said. “This company is not afraid to skinny down to the point where people are stretched.”
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