From Wikipedia, the free encyclopedia The Way Forward
The Way Forward
Ford Motor Company’s restructuring plan, made public sults (by 2008) will reduce Ford’s assembly capacity by
Forward.
in 2006, is known as The Way Forward 26%.
Ford is attempting to reduce fixed capital costs while The first closures were announced on January 23,
maintaining a special focus on cars and car-based 2006[1]. Ford announced on April 13, 2006 that two more
crossover vehicles. Over time, it hopes to make more of plants would close as well[2]. The plan was accelerated
its product line profitable instead of relying on a limit- with a mid-September announcement which accelerated
ed portion of the products for profit. Making good prof- the closure of the Norfolk plant and added the Essex en-
its across the product line requires that the company re- gine and Maumee stamping plants to the list[3].
duce the costs of development and production, while in-
troducing new products that connect with consumers.
In the latter half of 2005, Chairman Bill Ford asked
Product replacements
newly-appointed Ford Americas Division President Mark The following products are currently assembled at the
Fields to develop a plan to return the company to prof- Wixom (Michigan) Assembly plant, which is closing. They
itability. Fields previewed the Plan, dubbed "The Way will be replaced by future vehicles. In June 2006, Ford an-
Forward", at the December 7, 2005 board meeting of the nounced that it will not move production to St. Thomas,
company; and it was unveiled to the public on January 23, Ontario, Canada (where its body-on-frame platform-
2006. The plan was revised on September 15, 2006 to ac- mates Ford Crown Victoria and Mercury Grand Marquis
celerate plant closings. are produced), likely meaning that Town Car production
"The Way Forward" includes resizing the company to would end permanently. Ford eventually changed its
match current market realities, dropping some unprof- mind, and the company reversed this decision, announc-
itable and inefficient models, consolidating production ing in September that it would move the Town Car after
lines, and shutting down seven vehicle assembly plants all. As of 2011, production of the Town Car has been can-
and seven parts factories. Among these are St. Louis celled, with the MZT crossover intended as its replace-
Assembly (near St. Louis), Atlanta Assembly (near Atlan- ment for livery fleets.
ta), Batavia Transmission (Batavia, Ohio), Windsor Cast-
ing (Windsor, Ontario, Canada), and Wixom Assembly
(Wixom, Michigan). Up to 30,000 hourly and salaried jobs
The Way Backward
(28% of the total workforce) in North America over the This was a stinging attack by Japanese firms, Toyota and
next six years are expected to be eliminated, which is Honda, on Ford and its proposed restructure. The com-
comparable to similar cutbacks previously announced at ments were dismissed by Ford.
General Motors. These cutbacks are consistent with
Ford’s roughly 25% decline in U.S. automotive market Staff reductions
share since the mid-late 1990s.
New cars were developed faster using the new Global Up to 30,000 factory jobs would be eliminated with the
Product Development System (GPDS). This brings Ford’s downsizing envisioned in The Way Forward. The compa-
cycle time closer to its Japanese rivals. ny is also eliminating 4,000 salaried, contract, and agency
Ford’s realignment also included the sale of its wholly jobs during the first quarter of 2006, and the company is
owned subsidiary, Hertz Rent-a-Car to a private equity eliminating 6 or 7 corporate officer positions out of 53
group for $15 billion in cash and debt acquisition. The immediately.
sale was completed on December 22, 2005. A joint venture Ford is reportedly offering severance packages of up
with Mahindra and Mahindra Limited of India ended to $100,000 for workers who are willing to give up all
with the sale of Ford’s 15 percent stake in 2005. future benefits except their pension. The company will
Ford had announced a projected return to profitabil- also pay up to $15,000 in tuition for workers returning
ity sometime after 2010, but they returned earlier than to school. Workers over 55 can reportedly get a $35,000
expected during the year 2009. [1]< bonus to retire early, provided they have 30 years of ser-
vice with the company, and those with 28 years can get
leave and 85% pay for two years[4].
Plant closings
Ford reportedly plans to close 14 manufacturing plants
by 2012 including 7 that assemble cars. Short-term re-
1
From Wikipedia, the free encyclopedia The Way Forward
Date announced Plant name Location Date of clos- Products Employees
ing
January 23, 2006 St. Louis Assembly Hazelwood, Missouri 2006 Ford Explorer 1,445
Lincoln Aviator
Mercury Moun-
taineer
Atlanta Assembly Hapeville, Georgia Oct. 2006 Ford Taurus 2,028
Mercury Sable
Batavia Transmis- Batavia, Ohio 2008 transmissions 1,745
sion
Windsor Casting Windsor, Ontario, Cana- 2008 Engine blocks, parts 684
da
Wixom Assembly Wixom, Michigan June 2007 Lincoln Town Car 1,567
Lincoln LS
Ford GT
April 13, 2006 Twin Cities Assem- St. Paul, Minnesota, USA 2011 Ford Ranger 1,885
bly Mazda B-Series
Norfolk Assembly Norfolk, Virginia, USA 2007 Ford F-Series 2,433
September 14, Essex Engine Windsor, Ontario, Cana- 2008 Ford Triton engine
2006 da Ford Essex V6 engine
Maumee Stamping Maumee, Ohio 2008 body panels
Total 11,787
Date announced Product End of production Replacement
January 23, 2006 Ford GT September 21, 2006 Shelby Cobra GT500
Lincoln LS April 2006 Lincoln MKZ
Lincoln MKS
Lincoln Town Car June 2007 Assembly to be moved
Divestment New products
Ford’s plan called for divesting, selling, and closing some Ford, reportedly will also invest in new products and pro-
businesses in order to raise cash. ductions sites to better compete in the marketplace. The
• Jaguar Cars and Land Rover — On 2 June 2008, Ford company plans to build a new low-cost manufacturing
sold both of its British operations to Tata Motors of site in North America, possibly in Mexico.
India for a cost of £1.7 billion. Product plans reportedly call for more crossover
• Aston Martin — On 12 March 2007, a British SUVs, compact cars, and hybrid vehicles. The company
consortium led by Dave Richards of Prodrive announced the Ford Five Hundred/Mercury Montego
purchased the iconic automaker for £479 million. and Ford Edge/Lincoln MKX hybrids as part of the plan.
• Automobile Protection Corporation — Extended Ford also intends to revive the Lincoln brand.
warranty company APCO will also be sold
• Mazda, On November 18, 2008, Ford announced that
it would be selling a 20% stake in Mazda, bringing its
References
stake to 13.4%, and surrendering control of the • "Ford to End GT, Lincoln LS Production Runs". Ward’s
company. Auto World. http://wardsauto.com/ar/
• Mercury (automobile), On June 2, 2010, Ford auto_ford_end_gt/index.htm. Retrieved February 6,
officially announced the closure of Mercury by the 2006.
end of Q4 of 2010. • "LIVEBLOG: Ford’s "Way Forward" Plan".
Autoblog.com. http://www.autoblog.com/2006/01/
23/liveblog-fords-way-forward-plan/. Retrieved
February 6, 2006.
2
From Wikipedia, the free encyclopedia The Way Forward
Notes [3] "Ford Overhauls Way Forward Plan". AutoWeek.
http://autoweek.com/apps/pbcs.dll/article?AID=/
[1] "Ford Fights Back". Ford press release.
20060915/FREE/60915001/1024/LATESTNEWS.
http://media.ford.com/
Retrieved September 15, 2006.
article_display.cfm?article_id=22382. Retrieved
[4] "Ford offers $100,000 buyouts". Detroit News.
April 14, 2006.
http://www.detnews.com/apps/pbcs.dll/
[2] "Ford’s Twin Cities and Norfolk Assembly Plants
article?AID=/20060207/AUTO01/602070418/1148.
Will Be Idled As Way Forward Plan Moves Ahead".
Retrieved February 7, 2006.
Ford press release. http://media.ford.com/
article_display.cfm?article_id=23128. Retrieved
April 14, 2006.
Retrieved from "http://en.wikipedia.org/wiki/The_Way_Forward"
Categories: Ford Motor Company
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