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Ford to close more than 8 plants

Ford Motor Co. plans to close more than eight North American assembly and parts plants in a drive to revive faltering operations on the continent, industry paper Automotive News reported on Monday.
/ Source: Reuters

Ford Motor Co. plans to close more than eight North American assembly and parts plants in a drive to revive faltering operations on the continent, industry paper Automotive News reported on Monday.

Citing a "key company insider," the paper said the number-two U.S. carmaker was likely to close at least five vehicle assembly plants: in Atlanta; St. Louis; St. Paul, Minnesota; Wixom, Michigan; and Cuautitlan, Mexico.

Several powertrain and stamping plants will also close, it cited the unidentified source as saying based on his knowledge of a turnaround plan Ford is preparing and the group's overcapacity problems.

A Ford of Europe spokesman said he could not confirm the report and reiterated that the company would unveil its restructuring plan in January.

Ford has said it would unveil in January a restructuring plan for North America, dubbed "Way Forward," which Chief Executive Bill Ford Jr. has said would include plant closures.

Like General Motors Corp, Ford has seen its margins squeezed by soaring health-care and raw material costs and a decline in U.S. market share. So far this year, Ford's North American unit has lost over $1.4 billion before taxes.

GM has announced plans to cut 30,000 jobs through 2008 and close 12 facilities to reduce excess capacity.

In a separate interview with Automotive News, Bill Ford declined to give details of what the restructuring plan will include other than to reiterate that the group would reduce capacity and focus on new products that could fuel demand.

He confirmed that he had approached "most of the top executives in this industry" over the past six or seven years about coming to work for Ford, but added he was intent on remaining in the top post for now.

"Look, I'm firmly committed to this job, this company, and I'm going to fight like mad to get this company back to where it deserves to be," he said.

Bill Ford said the company would feel the pinch on margins as customers increasingly shift into cars from more lucrative products such as sport utility vehicles.

"Obviously, the segmentation downshift, from a margin standpoint, is not a good one. But we've planned these vehicles from the start to be a much healthier business proposition than their predecessors were. But once you start coming down the price point curve, you clearly have lower margins," he said.

Over time, margins should start to converge as customers opt for added content on small and mid-sized cars, he added.