Things not getting easier in Detroit
KAI RYSSDAL: By my count it's day number seven on the job for Ford CEO Allan Mulally. And it's not getting any easier. Today the board of directors locked itself in a conference room for a two day meeting that Wall Street's hoping will jump-start the troubled car company. Ford's expected to announce deeper job cuts and more plant closures. Let me say that one more time. More layoffs. More factory shutdowns. The company started a massive restructuring back in January. But Sarah Gardner reports, investors are looking for more than just a downsizing.
SARAH GARDNER: Thirty-four-thousand job cuts and 14 plant closings. Ford announced those harsh reductions in January but apparently they weren't harsh enough. High gas prices and declining truck sales this year pushed Ford's half-year losses to $1.4 billion. The company's board is expected to announce more drastic measures late this week. Word is, Ford will consider cutting white-collar staff by 30 percent — and soon. Rebecca Lindland is at Global Insight.
REBECCA LINDLAND:"They want to really go and try and do this in the friendliest way in terms of offering buyouts as opposed to layoffs. But it still is definitely going to hit Michigan very hard. So it could really have a detrimental impact on Michigan's economy."
Ford may also expand buyouts to all of its hourly workers in the U.S. But Wall Street's looking for more than cutbacks. Craig Hutson at research company Gimme Credit, says Ford's turnaround ultimately depends on product. The automaker is coming out with several crossover SUV's later this year. But even with a more fuel efficient line-up, Hutson says, Ford has it's work cut out for it.
CRAIG HUTSON:"It's an incredibly competitive business and they're up against some well-heeled competitors out there in Toyota and some other foreign automakers. I think they can do it but it's going to be a tough road for them."
Many analysts expect the United Auto Workers Union will ultimately cooperate with Ford on this latest downsizing, but UAW president Ronald Gettelfinger said this week: "I can tell you we won't like it, and we'll be debating it with them."
I'm Sarah Gardner for Marketplace.