The elimination of chief executive Bill Ford’s salary for 2002 is one of the major cuts the troubled American manufacturer Ford has announced as it tries to save R44 billion a year in costs.
The elimination of chief executive Bill Ford’s salary for 2002 is one of the major cuts the troubled American manufacturer Ford has announced as it tries to save R44 billion a year in costs.
At least four American plants will be closed, production slowed and 20 000 jobs will be cut. It is the largest retrenchment at Ford since the early 1980s, when 49 000 workers were laid off. This plan will cost Ford R44 billion in one-time charges; a R22-billion loss for 2001 is expected. Production will reduced by one million cars and trucks a year worldwide.
The Detroit News reported that the plants believed to be up for closure are Avon Lake, Ohio, which produces the Econoline van and is involved in the assembly of the Mercury Villager and Nissan Quest; Edison, New Jersey, which assembles Ranger pickups; and the Vulcan Forge plant in Dearborn, which is likely to be kept on a virtual shutdown until September 2003.
The Ontario truck plant in Oakville that makes the F-series is likely to be closed in September 2003 when a plant-closing ban agreement with a Canadian union ends.
Ford will also try to sell all or some of the Cleveland Aluminum Casting plant in Brook Park, Ohio and its new Woodhaven Forging plant.
Auto.com said that Bill Ford’s decision to forgo a salary is not unprecedented in business, but it is still rare. One of the most famous examples was former Chrysler president Lee Iacocca, who cut his pay for 12 months to R11 million in 1979.
But Ford will not be hard up for cash. His personal wealth was estimated to be R2,35 billion two years ago.
