Being one of the most renowned multinational automakers, we have been offering services in the industry since 1903, and have offered exemplary quality over the decades. But like every other enterprise, we also faced tough times, with heavy business losses, and we had to take the tough decision to lay off 30,000 employees in 2005.
It was a major decision, which we realized would affect our workforce, but it was one which we were forced to take due to our slipping market share and declining sales in the market.
In 2005, we announced a job cut of 25,000 to 30,000 employees and decided to close 14 facilities by the year 2012. It was a decision based on our restructuring plan to reverse the $1.6 billion loss that we had suffered the previous year.
The job cut we had in mind was to affect a 20% to 25% of the total employee workforce of the company in the North American division, which equaled to around 122,000 employees. We had an estimated that 87,000 workers worked on an hourly basis, while around 35,000 workers were salaried staff in the region.
As per our decision, we had determined to make certain plants idle up till 2088, and these included our plants in Atlanta, St. Louis, the assembly plants of Michigan’s Wixom, as well as the one in Ohio, Batavia Transmission. Windsor Casting, which was in Ontario, was also idled, as per the contract negotiations with our Canadian auto workers. The production shift in St. Thomas assembly located at Ontario was also reduced to one.
As per our decision, a total of 14 Ford facilities planned to cease production by 2012. These also included the seven assembly plants. Our Chief Executive, Bill Ford, said that the decision to lay off so many employees was really hard, yet inevitable at that point in time.
According to our then existing contract with United auto workers, our workers at the recently idled plants, would continue to receive most of their salary and benefits, until a completely new contract was formulated in the next year.
In 2005, we suffered a loss of 42% from the previous year, and only had reported earnings of $2 billion as compared to the $3.5 billion before that year. That is why we opted for an employee job cut and made our plants idle to prevent more losses and stabilize our slipping market share.