DETROIT Ford Motor Co. plans to conduct involuntary layoffs of salaried employees by August as part of a restructuring in the face of slumping sales and record-high gas prices, a spokeswoman said Wednesday.
Marcey Evans said the company hasn't yet determined how many white-collar jobs will be cut. But she said that unlike previous rounds of layoffs in recent years, employees won't be offered voluntary buyout packages with financial or early retirement incentives. Evans said the company wants the cuts completed by Aug. 1, which is not enough time to roll out voluntary offers and wait for employees to accept them.
"Given the speed that we're moving, we don't expect to conduct voluntary layoffs," she said.
The Detroit News reported Wednesday that some employees were told that Ford plans to cut its salaried work force by 10 to 12 percent, or more than 2,000. But Evans said Ford hasn't yet decided how many people will be cut.
Ford announced last Thursday that it was cutting North American production for the rest of this year and no longer expects to return to profitability by 2009 due to the rapidly deteriorating U.S. market. The company said it would release more details about its cost-cutting efforts in July.
In a memo sent Thursday to employees, Ford President and Chief Executive Alan Mulally said the company would need to make salaried job cuts. Mulally said employees will be notified once the company has determined the extent of the cuts.
"We want to do what is right for the future of our business and also respect the fact that these actions will personally affect our team and their families," Mulally said in the memo.
Ford had 23,700 salaried workers at the end of 2007. The automaker has cut the number of full-time salaried workers in North America by 10,800 since the end of 2005, mostly through attrition, early retirement offers and voluntary buyouts. In 2007, the company had so many people accepting offers that it was rescinding the offers from workers in some departments.
At the beginning of this year, Mulally said there would be more salaried cuts needed, but that those would likely come through attrition. Mulally said last week that the company has had to boost its restructuring efforts after sales slumped more severely than expected, especially for large pickups and sport utility vehicles.
With U.S. auto sales expected to drop to around 15 million this year, down from 17 million as recently as 2005, Ford needs to cut costs to help fund new technology and stay afloat until the market recovers, said Kevin Tynan, an auto analyst with Argus Research in New York. Ford and other automakers are investing in costly hybrid and electric vehicle technologies but won't see the benefits for several years, he said.
Tynan said Ford wouldn't be able to reach its layoff targets without involuntary layoffs. But he also noted the company and its U.S. competitors have weathered downturns in the past.
"If history is a guide, we've been through it before. You get to these points where you restructure, then you start to recover," Tynan said. "It's at least an industry and a group of companies that have proved they can get pretty creative when the back's against the wall."
David Cole, chairman of the Center for Automotive Research in Ann Arbor, said Ford's efforts to globally integrate engineering and design have probably led to significant redundancy.
"It's like the general that will sacrifice a battalion to save a division," he said. "You've got to get to the turnaround point where you go positive on cash."Ford shares fell 4 cents to $6.76 in early afternoon trading.
Auto Writer Tom Krisher in Detroit contributed to this report.