Ford to Cut Shifts, Lay Off Some 2,500 Workers


Ford Motorsaid Monday it would eliminate shifts at four U.S. plants and lay off some 2,500 workers -- or almost 5 percent of its remaining work force -- as part of an effort to cut costs and return to profitability next year.

Ford announced today that it is cutting production by 21% resulting in downtime at the assembly plant in St. Thomas Ontario on Friday Aug. 18, 2006. Ford Motor Co. announces sharp cuts in its North American production that would force it to partially shut down plants in the U.S. and Canada in the fourth quarter. (AP Photo/Canadian Press, Geoff Robins)
Geoff Robins

The layoffs come at a time when the No. 2 U.S. automaker is offering buyouts and early retirement incentives to all 54,000 of its U.S. factory workers as it attempts to recover from a $2.7 billion loss in 2007.

Ford said it would run its Chicago and Louisville, Kentucky, assembly plants on one shift rather than the current two shifts starting this summer.

Ford's Chicago plant builds its Ford Taurus and is readying to ramp up production for the all-new Lincoln MKS luxury sedan slated to go on sale starting this summer.

The Louisville plant builds the Ford Explorer and Mercury Mountaineer sport utility vehicles. Taken together the two plants employ about 4,500 workers represented by the United Auto Workers union.

In addition, Ford said it would cut a shift of workers at its Cleveland Engine Plant No. 2 in April. That plant makes a 3.0-liter engine. Plans to restart production at Cleveland Engine Plant No. 1, which makes a larger 3.5-liter engine, have been pushed back to the fourth quarter from the spring.

Ford said it expected to be able to maintain planned production volumes at the four plants by keeping them running more consistently on a single shift and reducing down time.

Ford , which is aiming to return to profitability in 2009, has offered all of its U.S. factory workers buyouts and early retirement incentives with one-time payouts of up to $140,000.

An earlier round of buyouts cut almost 34,000 workers from Ford's payroll in 2006. This time, as part of a deal with the UAW, Ford is offering richer terms for the roughly 12,000 remaining workers eligible to take retirement packages.

Later Monday, Ford is set to release February U.S. sales results that are expected to show a sharp decline from year-earlier levels.

Analysts expect industry-wide 2008 U.S. auto sales to extend a downturn that began to accelerate in the second half of last year reflecting a slumping housing market, higher gas prices and tighter credit.