Jeremiah 29:11

Ford said to eye new job cuts

Report says another round of salaried job cuts are due to be announced as soon as Friday; ex-Congressman Gephardt to help Ford's talks with UAW.
September 11 2006: 6:59 AM EDT
NEW YORK (CNNMoney.com) -- Ford Motor Co. could announce a new round of salaried job cuts as soon as Friday, according to a published report.

The Detroit News reported Monday that Ford (Charts) will start by offering voluntary buyout packages and early-retirement incentives to white-collar workers.

While the nation's No. 2 automaker expects to achieve headcount reduction targets through voluntary programs, involuntary layoffs are likely to follow in some areas if too few workers take advantage of the incentives, according to the report.

Ford, which has between 35,000 and 40,000 U.S. salaried employees, announced earlier this year that it was trimming 4,000 salaried positions as it tries to stem losses in its core North American auto operations.

Ford spokeswoman Marcey Evans would not discuss Ford's plans.

"We don't comment on speculation, nor do we comment on any business that we're taking before the board," she told the News.

The Ford board is set to meet Wednesday and Thursday. The company is expected to announce further steps in its turnaround plan originally announced in February, when it said it would cut 30,000 hourly positions and close 14 plants by 2014.

Wall Street is looking for the company to speed up those plant closings and hourly staff cuts, perhaps following the lead of General Motors (Charts), and offering all the union-represented employees retirement incentives or severance packages to leave the company sooner rather than later.

"Ford has 87,000 hourly workers. If 86,000 were to leave, the market would be ecstatic," Bradley Rubin, an analyst with BNP Paribas, told the paper.

Gephardt working with Ford unions, execs
The News also reported that former Democratic congressman and presidential candidate Richard Gephardt, a long-time ally of labor unions, has become a key behind-the-scenes player in Ford's efforts to trim its costs.

The paper said Gephardt will serve as a special adviser and consultant to Ford through next summer's contract negotiations with the United Auto Workers.

Gephardt told the paper he is working with Ford to find creative solutions to its labor costs issues.

"We're trying to use some innovative ideas to try to square the circle," he said.

The paper reported that Gephardt also helped recruit Boeing Co. (Charts) executive Alan Mulally to become the new CEO of Ford, a position he was named to last week.

The paper said that in 2005, soon after Gephardt left office, Mulally hired him to help with Boeing's tricky labor negotiations with the machinists union in the summer of 2005. In September 2005, Boeing reached a deal to end a month-old strike by the International Association of Machinists, as Mulally and IAM President Tom Buffenbarger worked out a deal in talks attended by Gephardt.

Earlier in 2005, Gephardt helped investors buying Boeing plants in Wichita, Kan., and Tulsa, Okla., secure a labor deal with the airplane maker's machinists' union. He now serves as a director of the company formed after that purchase, Spirit AeroSystems Holdings.

Is an outsider the right person to save Ford?