Struggling

automaker

using new

tactic to

slash its payroll

August 12, 2005
BY MICHAEL ELLISFREE PRESS BUSINESS WRITER

Clarification: Friday's front-page article about Ford Motor Co. dismissals said the company chairman, Bill Ford, sent a reassuring message to "the so-called Ford Family." In fact, "Ford Family" was the chairman's phrase in his message. The Free Press should have avoided the "so-called" characterization.

Ford Motor Co., for the first time in generations, has resorted to firing employees and immediately escorting them from corporate buildings -- roiling the company and compelling Chief Executive Officer Bill Ford to send a message this week to reassure the so-called Ford Family.

Until now, Detroit automakers have cut thousands of white-collar jobs almost exclusively by getting employees to voluntarily quit through early retirement, buyouts or letting open positions go unfilled.

But not nearly enough people have come off Ford's payroll to meet its initial goal of cutting 2,750 of its 35,000 North American white-collar workers.

Even worse for workers, the company reported a $907-million loss in the April-June period this year for its North American division, and says now that cuts may have to go even deeper than 2,750 positions.

That means Ford is getting tough about cutting people loose. The company wouldn't say Thursday how many people it has fired in recent weeks, but Bill Ford acknowledged the bold new measures in an e-mail to employees on Monday.

"Some have asked me why we have had to ask employees to depart immediately," he wrote. "Well, the management team has discussed this and concluded that it's kinder to make our separations in this fashion, rather than have the employee remain in a difficult situation. Frankly, there's no easy way to do this."

Asked when Ford had last cut staff by firing people, company spokesman Oscar Suris said Thursday, "It has been a long, long time. I just can't say if there's been one other instance."
Ford drew up a policy for firing salaried workers in 2002, but didn't enact that plan until last month, Suris said.

Ford has cut its staff by tens of thousands over the last decade, but it is still bleeding money. Last month, the automaker fired 20 to 25 public relations staff members, including some who had worked for the automaker for decades, people familiar with the matter said.

This week, Ford announced plans to unify the sales and marketing field staffs for its Ford and Lincoln Mercury divisions, which a spokeswoman said will result in more firings.

The new measures have shocked Ford employees.

"It's fairly unprecedented that they're walking people out the door," one Ford white-collar employee said Thursday. The worker, who knew many of the fired employees, did not want to be identified for fear of retribution.

A second salaried worker, who also did not want to be identified, said Ford was being careful where it made the cuts, and that some departments are overstaffed.

"They're not just taking an ax or a machete and hoping for the best. It's really being done to departments that can afford to cut it," he said Thursday.

A third worker, who recently left the company and did not want to be labeled a disgruntled worker, said Thursday that Ford had been slow to downsize, even as it steadily cut jobs since 2002.

In the ever-cyclical business of the automotive industry, Ford traditionally would downsize during a recession but then rehire many of the workers once the economy recovered and profits grew.

However, Bill Ford explained in his e-mail that the company isn't facing a traditional economic downturn.

"We're not downsizing temporarily with the hope that conditions will get better," he said.
At a meeting in June, Ford executives discussed the possibility of cutting 30% of the company's white-collar workforce in the North American automotive unit, according to a person who attended the meeting.

"There's lots of plans under discussion," said Suris, who declined to detail any particular ideas on the table.

Ford's firings reflect the cold reality facing today's employees, workforce experts said.

"It used to be that if there was a downsizing, it would happen in a way that would show that you're taking care of us, that you're being a caring employer," Ellen Kossek, a professor of human resource management at Michigan State University, said Thursday. "Ford is not going out of its way to not be a nice employer. They are just making the difficult choices."

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