Ford Motor Co. is expected to soon announce a massive corporate that will lower white-collar costs by 30 percent and include cutting jobs and benefits, according to the online version of The Wall Street Journal.
The moves, which the Journal said could be disclosed on Friday, are under discussion at Ford’s board of directors meetings, held on Wednesday and Thursday this week. They will also include a new pricing strategy.
Ford spokesman Oscar Suris had no comment on the report. He said the automaker would announce its revised restructuring plan later this month. “We’re going to do it in a public fashion,” he said.
Shares of automaker Ford Motor Co. rose Wednesday in heavy trading on the New York Stock Exchange ahead of the expected announcement.
Ford has said recently it will accelerate its “Way Forward” restructuring plan after losing $1.4 billion during the first half of the year.
Ford, the nation’s No. 2 automaker, announced in January that it would cut up to 30,000 jobs and close 14 facilities by 2012, but company officials said they are working on a plan to speed up the restructuring.
Morgan Stanley’s Jonathan Steinmetz said that, after coming up short on its two prior restructuring attempts, he expects Ford’s new plan to include “meaningful” annualized cost-cutting of $5.5 billion to $6 billion.
“This will center on reduced labor costs, especially hourly labor but also salaried,” Steinmetz wrote in a note to investors. “We see most of the cost savings in labor as achievable especially given the UAW’s apparent willingness to cooperate with a broader employee buyout.”
Steinmetz estimated buyout costs for Ford to be about $3 billion, but said it will ultimately take billions more to pay for brand exit costs, dealer consolidation and costs related to exiting its former Visteon business.
Ford recently hired Alan Mulally, a former Boeing executive, as its new CEO, replacing Bill Ford Jr., who remains executive chairman of the company.