Ford's restructuring programme to cost $11 billion
By Our Corporate Bureau | 01 Mar 2007
Loss making Ford Motor Co, which last year ceded its ranking as the world's second largest automaker to Japan's Toyota, estimates its current restructuring programme to cost $11 billion (Rs 48,631 crore), with compensation for staff lay-off accounting for over half the costs.
Ford, which reported a record loss of $12.7 billion last year, is implementing a massive turnaround plan that includes reducing manufacturing capacity and closure of 14 plants involving 51,000 job cuts — 37,000 hourly shop floor workers and 14,000 salaried employees — in a bid to return to profitability.
The restructuring programme envisages a return to profitability by 2009. Ford has been heavily dependent on sales of its trucks and sports utility vehicles (SUVs) while its Japanese and Korean rivals have been grabbing market share with smaller and more fuel- efficient cars.
Ford, which slipped to fourth place in US market sales, after GM, Toyota and DaimlerChrysler in November 2006, may be overtaken by Toyota in US car sales as well.