Ford says 38,000 accepted buyout offers
(AP)Updated: 2006-11-30 08:50
McTevia said that move and the buyout figures signal that the automaker believes it will be able to operate profitably in the future. Ford has said it expects to return to profitability by 2009.
But McTevia said Ford faces stiff competition from companies on much stronger financial footing.
Ford's share of the domestic market has declined from around 26 per cent in the early 1990s to 17.6 per cent at the end of October. In July, Ford sold fewer vehicles in the US than Toyota Motor Corp. for the first time, but Ford's US sales have surpassed the Japanese company since then.
Pete Hastings, vice president of corporate fixed income at Morgan Keegan in Memphis, Tenn., said the buyout announcement "represents one step among many on a long road" to Ford's turnaround. He said the automaker still must address its lost market share and structural costs when it renegotiates with the United Auto Workers next fall.
"They'll probably need another round of restructuring to adjust to the lower capacity from falling market share," Hastings said.
"They face tremendous challenges. It's going to be tough for them to achieve the turnaround. It's certainly a multiyear process, and I'm sure we'll see plenty of changes in the upcoming months."
As for the current round of buyouts, while workers can change their minds and back out of the deals, company officials predicted only a single-digit percentage would do so before their package takes effect.
Those who accepted the buyout packages will begin to leave the company in January, with the window open until Sept. 1, 2007, the company said.
At the Ford Rouge plant in Dearborn, on Wednesday, Vivian Davis said she's thrilled to be among those taking an early retirement incentive.
"I was two years away anyway, so this is just helping me out," said the
48-year-old assembly worker from Detroit. "I get 85 per cent of my pay, stay at
home for two years, and then get full retirement."
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