Ford: Efficiency, Um, Later!

Edward Niedermeyer
by Edward Niedermeyer
ford efficiency um later

Ford has spent considerable amounts of money trying to make its North American workforce more cost-effective. Last year's contract with the United Auto Workers (UAW) allowed Ford to hire new workers at lower pay rates, while trimming higher-paid labor through buyouts and early retirements. But when the 54k buyout offers translate into actual gains in efficiency is "anyone's guess." That's the straight dope from VP for Labor Affairs Marty Mulloy [via Wards]. Ford's cost savings are directly related to the number of employees actually taking the buyout offer ('natch), and Ford still isn't saying how many workers are expected to sign up and bail out. Meanwhile, Mulloy says the American automaker will not be making any new entry-level hires this year. That's because five thousand highly-paid Ford workers still languish at the 11 factories once owned by Automotive Components Holdings (ACH), which Ford (in its infinite wisdom) bought in 2005. While Ford wants to sell or shutter the plants by year's end, it has to either hire or buy-off the ACH employees. Folks, it could be years before the Blue Oval's labor costs approach those of Toyota, Honda and other transplant competitors. And Ford's talking about insourcing?

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  • Red dawg Red dawg on Mar 07, 2008

    And this from the same company that expects to be profitable by 2009 !!!!!!!! Not in this lifetime. Just wait and you'll hear them proclaim that it will be 2010, 2011 or 2012 when profitability returns (if FoMoCo is luckly). I'm seriously begining to doubt if FoMoCo will EVER be profitable AGAIN !!!!!!! Especially with the way the company is being run and managed. Oh and FoMoCo just announced bonuses of $1000 to most everyone in the company. Is it any wonder they are going down so fast????? The ship is sinking !!!!!!!! My money is on Chrysler being the first to file for bankruptcy protection and FoMoCo a close second. Ford will be profitable ONLY when it has better management and then it will probably be more efficient.

  • Raast Raast on Mar 08, 2008

    Ooooh, lots of forward thinking in the whole equation there. Which genious executive thought up this strategy and what six (or seven) figure bonus was awarded for it? As for the potential "quality" of the end product, I should believe that old ad, that went something like "the quality goes in, before the name goes on" - well, shouldn't I?? Reality is - I had one once, and I'll never have another (it was a lasting impression).

  • Jthorner Jthorner on Mar 08, 2008

    The whole Delphi and Visteon spin-off nonsense looks pretty silly in retrospect, doesn't it?

  • RobertSD RobertSD on Mar 08, 2008

    guyinconito - thank you for bringing sanity to this conversation. Ford's goal is to get rid of 8-10k employees in this round - my guess is that they will only get about 5-6k with the economy what it is. They will still have the 5k employees from ACH (Visteon) and then they will be able to start hiring lower wage workers. However, right now, the automotive industry isn't doing so well... so there's no reason to hire these new workers even if they do have thousands of slots available. The tasks these workers are being hired for are hardly complex. These are not your skilled tradesmen. I would bet that speed might be impacted a little, but I doubt quality will change much. The ramp up time for an assembly worker - especially one that probably used to be an assembly worker but is now unemployeed - is very small. The process of manufacturing at Ford is dynamic enough to protect its quality. As for Visteon, guyincognito is right, the UAW drove the decision to keep Ford tethered, creating ACH. That Ford bailed them out is hardly surprising. Visteon accounted for a huge part of Ford's supply. If Visteon had gone under, Ford would have gone out of business. Period. You can't just start sourcing billions of dollars in components from someone else overnight. Doesn't work that way. Ford is doing a very good job with the sale of ACH plants and elimination and integration of employees it took on given the realities of the business and supplier landscape, the demands of the UAW, and its own troubles internally.