Ford accelerates restructuring

Ford Motor Co. today announced plans to further reduce its capacity and work force, and ramp up new product introductions as it accelerates its North America "Way Forward" turnaround plan.

Ford will cut its North American salaried-related work force by about a third and offer buyout packages to all Ford and Automotive Components Holdings (ACH) hourly employees in the U.S. The reductions will contribute significantly to reducing ongoing annual operating costs by about $5 billion. In addition, the company will renew 70 percent of its North American product lineup by volume by the end of 2008.

"These actions have painful consequences for communities and many of our loyal employees," said Bill Ford. "But rapid shifts in consumer demand that affect our product mix and continued high prices for commodities mean we must continue working quickly and decisively to fix our business. Mark Fields and his team deserve credit for the accelerated Way Forward strategy, which puts us on an even faster product-driven path to success.

"Alan Mulally's experience in turning around a major industrial company will help guide the implementation of these measures as he assumes leadership of the company," Bill Ford continued. "The actions we announce today—coupled with the North American production cuts we announced last month, the strategic alternatives we are considering for Aston Martin and a push for greater progress from our operating units and brands around the world—are part of a series of actions that Alan and our entire global team will be taking to put the company on a path to sustained profitability and success."

The complete announcement, which includes specific steps the company is planning to take toward a product-led turnaround, accelerated cost savings, a leaner structure, improved efficiency, and capacity adjustment, can be found here.