Talk of Job Cuts Surrounds Auto Show
DETROIT – Speculation, rumors, leaks and announcements about job cuts at General Motors Corp. and Ford Motor Co. are stealing much of the spotlight from the dozens of new vehicle introductions at the North American International Auto Show.
The most sought-after quarry during this week's media preview is the lowdown on the restructuring plan Ford will announce Friday.
Between interviews with top executives in the recesses of Ford's multilevel exhibit area, reporter ``scrums'' on the show floor and rubbing elbows with executives at nearby eateries, reporters have been trying to quiz, cajole, interrogate and beg them for details.
DaimlerChrysler AG went through the same challenge at last year's show, when speculation was rampant over that company's impending restructuring announcement.
``A year ago it was impossible to talk about product,'' Dieter Zetsche, president and CEO of the Chrysler Group of DaimlerChrysler, said Tuesday. ``Look at us now, the discussion we're having about product, we could never have done that a year ago.''
Across the Cobo Center show floor in another collection of prefab offices, GM executives are busy spinning their take on news that leaked out Monday - its plans to offer early retirements and voluntary buyouts to thousands of salaried employees.
In one such room Tuesday, vice chairman Robert Lutz said GM wants to cut 10 percent of its North American white-collar work force, or about 4,700 people, through attrition and the buyouts.
``No aspect of this should be seen as an emergency action,'' Lutz said. ``It's business as normal.''
For the last several years, GM had set a goal of reducing its white-collar work force by 10 percent each year through such offers and retirements as part of its ongoing ``slimming'' and cost-cutting efforts, Lutz said. The No. 1 automaker also will delay handing out annual merit raises to employees until late 2002. GM traditionally gives out pay raises at midyear.
One analyst predicted the product messages would reach customers despite all the attention paid to business issues.
``They're looking for products and services that meet their needs, so I think they're cutting through that clutter,'' said analyst J Ferron of PricewaterhouseCoopers.
While financial and industry analysts have predicted Ford will announce anywhere from 12,000-20,000 job cuts, Ford chief operating officer Nick Scheele called them ``guesses.''
Ford employs approximately 174,000 people and operates 47 plants in North America.
On Tuesday, Jim Padilla, the head of Ford's North American operations, echoed Scheele's remarks when asked about the company's restructuring plans.
``Just keep guessing like the rest of them,'' he said in a very short interview following the event introducing the 2003 Ford Expedition.
A company official requesting anonymity said Tuesday that assembly plants in Edison, N.J., and Oakville, Ontario, were prime candidates for the chopping block and that two other plants may be cut as well.
Messages were left Tuesday for United Auto Workers national representatives in Detroit and with UAW officials in New Jersey seeking comment.
Scheele said one of the features of the restructuring would be making the company's assembly plants more flexible, enabling them to adapt to build several different product lines depending on demand. The company's contract with the UAW forbids wholesale plant closings, but he said the company would be working with the UAW on the local level.
Chairman and CEO William Clay Ford Jr. said the company will not ``cost-cut'' its way out of its financial troubles, but will focus on bolstering its product line and improving quality.
All the details will finally be revealed Friday at a meeting with financial analysts and reporters in a building that once housed a short-lived tourist attraction called ``The Spirit of Ford.''
``It's a question of matching your capacity with your sales demand, and if you have too much capacity, it's too expensive,'' said Brian Ambrose, national industry director, automotive practice at KPMG LLP.
``The offset is, do you run it, push incentives and bite the bullet?'' Ambrose asked.
``Nobody needs to panic,'' said Ferron. ``What you need to do is know you can't expense, control or cut your way into a profit. You have to do all the other things consumers want.''