Ford Motor Co. unveiled a massive restructuring this morning that includes closing one Canadian engine plant, but gives new life to an assembly plant near St. Thomas, Ont., and a new vehicle for another plant in Oakville.
Ford will close its Essex Engine Plant in Windsor, Ont., a move that will eliminate about 600 jobs in that city.
But it will shift production of the Lincoln Town Car to St. Thomas and begin assembling a new "people-hauler" in Oakville in 2008.
"These actions have painful consequences for communities and many of our loyal employees," said Bill Ford. "But rapid shifts in consumer demand that affect our product mix and continued high prices for commodities mean we must continue working quickly and decisively to fix our business," Mr. Ford said in a statement.
Canadian Auto Workers union president Buzz Hargrove said the union is going to "fight like hell" to get Ford to reverse its decision to close the Essex Engine Plant.
"We take heart from our ability to turn the Oshawa situation around," Mr. Hargrove told a news conference citing a move by General Motors Corp. to choose a plant in Oshawa, Ont., as the site for production of the Chevrolet Camaro, after it originally earmarked a plant in that city for closing.
The union will also open negotiations with Ford Canada officials to convince them to offer a more generous retirement package than the $70,000 now offered, he said.
Ford's U.S. parent is offering up to $140,000 (U.S.) as an incentive to United Auto Workers members to retire.
In addition to those moves, Ford will slash its salaried work force in North America by 14,000 people or one-third of its total. This includes 4,000 jobs that Ford said have already been eliminated this year.
It will also close all parts plants its purchased from its former parts subsidiary Visteon Corp. last year. And Ford said it will also suspend dividend payments.
Friday's announcement is an acceleration and enhancement of a program first announced in January that involved closing 14 factories-including seven assembly plants-and cutting 30,000 jobs in North America by 2012. Only seven of the plants were identified, which led analysts and investors to criticize the plan as vague and lack urgency.
Since then, however, Ford's mounted to about $1.4-billion (U.S.) in the first and second quarters and its share of the U.S. market has slid further.
The auto maker has already announced that it's slashing fourth-quarter vehicle production by 21 per cent.
That move led to the elimination of one shift of production at the company's Windsor engine plant, which makes V8 engines for trucks and sport utility vehicles. Sales of those vehicles have plunged in the U.S. market amid high gas prices.
The original plan envisioned the plant near St. Thomas scaling back to one shift of production next year.
At the time, Ford also reiterated a commitment made a year ago to develop a new engine to be built at the Essex Engine Plant, also located in Windsor.