Workforce Reductions
Our accelerated plan reduces salaried-related costs through the elimination of the equivalent of about 14,000 salaried positions, which represents about one-third of our North American salaried workforce. This reduction includes eliminating the equivalent of nearly 5,000 salaried positions by the end 2006. The additional reductions are being achieved through early retirements, voluntary separations and, as necessary, involuntary separations, with most employee departures expected to be completed by the end of the first quarter of 2007.
By agreement with the UAW, we also extended early retirement or separation packages to all UAW-represented hourly employees, including Ford employees at our Automotive Component Holdings, LLC (ACH, formerly Visteon) plants. Through year-end 2006, about 37,000 hourly employees represented by the UAW had accepted (and not rescinded) an early retirement or separation offer. The vast majority of these employees are expected to separate from the Company by September 2007, though many of the offers include an opportunity for the employee to rescind acceptance until the time of separation. The accelerated plan to sell or close all ACH facilities by the end of 2008 will result in additional personnel reductions.
Overall, including ACH hourly employees, as of December 31, 2006, we had about 89,000 hourly employees in North America (including Canada and Mexico), down from about 99,500 employees at year-end 2005. By the end of 2008, our plan is to operate with between 55,000 to 60,000 hourly employees in North America.
Capacity Alignment
We also intend to reduce and realign our vehicle assembly capacity to bring it more in line with demand and shifting customer preferences.
As part of this reduction, we have announced plans to idle 16 North American manufacturing facilities, including seven vehicle assembly plants, by the end of 2012. Of these, the following nine facilities have been or are planned to be idled by the end of 2008:
- Atlanta Assembly Plant (idled in 2006)
- Batavia Transmission Plant (to be idled in 2008)
- Essex Engine Plant (to be idled in 2007)
- Maumee Stamping Plant (to be idled in 2008)
- Norfolk Assembly Plant (to be idled in 2007)
- St. Louis Assembly Plant (idled in 2006)
- Twin Cities Assembly Plant (to be idled in 2008)
- Windsor Casting Plant (idled in 2007)
- Wixom Assembly Plant (idled in 2007)
Also in 2007, we are eliminating a shift at each of the Norfolk, Twin Cities, St. Thomas (Ontario) and Michigan Truck assembly plants, and plan to add a third crew at the Dearborn Truck Assembly Plant to accommodate additional F-150 truck production.
We continue to work to sell or close the majority of our ACH facilities by the end of 2008, though we now expect that portions of one or two facilities may remain open beyond 2008 to provide for an orderly re-sourcing of business to the supply base.
