Ford Motor Co. (NYSE: F) may cut additional 9,000 U.S. factory jobs via its latest buyout offer, sources told Bloomberg News Monday.
The cuts, on top of 33,600 union workers who left through buyouts / early retirement in 2006 and 2007, would speed Ford's return to profitability as it would replace them with new workers who would be paid half as much.
Ford's shares gained 5 cents to $6.13 in Monday morning trading on the news.
Necessary cuts
Independent stock analyst C. Leonard Bauer, formerly of Prudential, told BloggingStocks Monday the cuts are part of painful, but necessary changes Ford must make to survive.
"Ford has done a good job in the initial stages of it restructuring, closing useless plants, increasing efficiencies at existing assembly lines, and lowering legacy costs. But the really big savings will come from getting a lower-wage workforce in place," Bauer said. "Because of global competition, auto makers must reduce labor costs by about 30-50%, just to survive. This is another step in that process." Bauer added that he does not have a rating on the company, nor own Ford's shares.
Further, Bauer said he expects the cuts to speed Ford's return to profitability, arguing that if the U.S. recession is mild, or lasting two quarters or less, Ford will earn a profit in 2009. Bauer expects Ford to lose about 15 cents in 2008 and earn about 60 cents in 2009.
Ford may cut 9,000 more U.S. plant jobs
Posted Feb 11th 2008 10:41AM by Joseph Lazzaro
Filed under: Ford Motor (F), Employees
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Reader Comments (Page 1 of 1)
2-12-2008 @ 10:55PM
Mr. Mark A. Gatz said...
No help at all from Ford, and that's not right....SHAME. http://www.otisfordsucks.com Thank you.
2-16-2008 @ 9:25PM
John Stec said...
The workers are taken buy outs, what about the CEO's salary? What is management doing to lower there dollars valve reduction.? Lets hear some stats on executives salaries, they were also part of the problem. This company crisis should be a double edge sword, it must hurt both ways.
Lee Iaccaca was a leader by example we need more people like him.