Ford Slashes Jobs, Volvo Turns On Consultants and Suppliers

Edward Niedermeyer
by Edward Niedermeyer
ford slashes jobs volvo turns on consultants and suppliers

In the wake of last week's revelation that FoMoCo ain't out of the woods yet, the blue oval is in full-on cost-cutting mode. Detroit News reports that Ford VP Jim Farley has announced a 10-12 percent cut in its U.S. salaried workforce to go into effect by August. Saying that Ford is struggling to cope with "a structural change to our economy," Farley told employees at a company "town hall" meeting that the approximately 2k layoffs would be involuntary firings rather than voluntary buyout offers. But Farley isn't losing sleep over the firings, as he sees Ford's problems as being caused by external economic forces over which he has no control. "I would expect other car companies to make similar announcements," Farley told employees when announcing the cuts. "They have the same issues that we do — even Toyota." Even Toyota, eh? Meanwhile, FoMoCo is also trying to tart up its troubled Volvo division by throwing consultants and suppliers under the bus. Automotive News [sub] reports that Volvo has announced that it will pay consultants and suppliers ten percent less than the current contracted rate for services. Proving that shit always runs downhill to the supplier, Volvo spokesfolks blame weak U.S. sales (which they expected) and weak European sales (which they didn't), saying "We're looking into how we can turn the business around." What, so soon? Look for this to simultaneously increase speculation of a Volvo sale (why not screw the suppliers if you've already written the brand off?) and decrease the likelihood of said sale (same reason).

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  • Wjo Wjo on May 29, 2008

    Hmmm...actually, Volvo has provided quite a bit of value to Ford in terms of platforms. The question is what has Ford done for Volvo? Much as I like the brand and own two, I'll admit that I am a small part of the market. Volvo NA marketing is terrible, and the product line up from Volvo is either solid but stale (s60, xc90) or has misteps -- the s80 and v70/xc70 are larger, heavier cars than what they replaced but don't offer a significant increase in interior room or that much more luxury. Not really good enough in a hyper competitive market. I have high hopes for the xc60 and what it promises for the new s60, but time will tell. What Volvo needs to do in the US is increase its mileage -- it had a real advantage with its 5 cylinder turbo charged mills (and still does -- my s60 will get 30mpg+ if I do the speed limit). But the new s80/v70 are not so efficient. More broadly, Volvo could easily translate better fuel economy to a holistic green approach to car manufacture and living (be the green brand -- safe for the human, safe for the environment). The time is right for such a luxury alternative. Volvo started down this path a few years ago, but has not not pursued it very well. Subaru NA is currently pursuing that path very well, to their credit. Ford clearly doens't know what to do with Volvo, so the sooner a sale the better. I'm just not sure on the buyer....

  • Jolo Jolo on May 29, 2008

    ...VP Jim Farley has announced a 10-12 percent cut in its U.S. salaried workforce to go into effect by August... Anyone willing to bet money that engineering, the one department that should not take the hit, be the majority of those let go? The managers/supervisors are kissing each other's backside to hold onto their job until retirement time. The lowly engineer will probably be the ones that need to bring their own Vasaline. It's working at Delphi and GM, should work fine at Ford.

  • Apdnarg Apdnarg on May 29, 2008

    We own two Volvos: a '92 960 wagon nad a '90 740GL sedan. Both are solid, dependable RWD cars which perform well and are fairly fuel-efficient. Volvo SHOULD return to its roots and make wagons and sedans with RWD and either a 4 or 6 cylinder in-line engine. As for safety, as has been stated many times in various TTAC columns, every car maker has to comply with safety mandates, so that is no longer Volvo's claim to fame. As much as I am partial to Volvo because of our two "bricks," I don't like any of the new FWD stuff enough to consider trading either of our two for a new one, no matter how much I may like the styling or anything else about them. (Incidentally, in John Horner's commentary, he states "Honda, for example, is now in the middle of a long term safety engineering priority push." There have been reports recently of Honda Accords involved in accidents in which the cars have gone off the road for no apparent reason, and a couple of them have resulted in the car splitting in two on impact. The operators have been killed, and the cars had not been operated at excessive speeds for the road and/or conditions (about 70 mph in a 65 zone for one.) Anyone else hear of anything like this?)

  • Chui Chui on May 29, 2008
    At least Ford is reacting quickly to sudden changes in market conditions. For those of you who think they should have seen it coming, they did and soon (not soon enough) will have a whole new lineup of smaller cars. Remember that gas has gone up $1.00 in about 1 month - a huge increase that drastically changed the market. Ford immediately responded by cutting production of trucks, increasing production of cars and cutting payroll. The old Ford wouldn’t have reacted so quickly. Sorry, but I'm not buying it. They are not reacting quickly. If they were reacting quickly then surely on September 12, 2001 there would have been plans for small cars and turbodiesel powerplants for the Focus and Ranger. No, things are most certainly not changing rapidly enough & these issues (and a bunch more) were sent to upper management from early 2000 through 2007. There exists a total lack of vision that will hamstring (by incessantly following the lead of Toyota, Honda, etc.) any "revelations" from the guys in charge. I’ll bet they wish they hadn’t increased production of the F150s in the 2nd quarter to cover the units they will lose during the model changeover! Those trucks are still arriving at the dealers (got a whole truck full of inventory today: 4 F150s, 1 Focus, 1 Fusion, 1 Grand Marquis). Better yet, I bet they wish they had a single body-in-white for the Focus with turbodiesel as an option and using that same basic powerplant to power the Ranger - which they probably wish they had developed as well as they've developed the F150... Then there is the no small amount of cash thrown away on the Contour/Mondeo; unbelievable. The new Mercury Milan/Ford what's-its-name SHOULD have been the current Mondeo and the Mazda 6 should have been based off of the Mondeo platform thereby reducing the cost of producing the vehicle. But what do us auto engineers (especially the ones who are car enthusiasts) know? Apparently not much to the "gold collar crowd". It's too little, too late. The price of a barrel of oil is NOT going to subside at all; and the price is merely the EFFECT not the CAUSE... and I don't think more than 1% have a clue. I'm afraid "the chickens have come home to roost". And they are very upset. The terrible thing is that once the infrastructure for manufacturing/production is gone the nation is in critical condition. We're approaching that point now.