DETROIT – Ford Motor Co. on Friday announced sharp cuts in its North American production that would force it to partially shut down plants in the United States and Canada in the fourth quarter.
The company said fourth-quarter production would be down 21 percent, or 168,000 units, from last year. Third-quarter production will be 20,000 units below what was previously announced.
For the full year, Ford plans to produce about 9 percent fewer vehicles than last year.
“We know this decision will have a dramatic impact on our employees, as well as our suppliers,” Chairman and Chief Executive Bill Ford said in a note to employees. “This is, however, the right call for our customers, our dealers and our long-term future.”
Dearborn-based Ford, which lost $254 million in the second quarter, vowed last month to speed up its North American restructuring.
Bill Ford told employees the cuts are part of that acceleration and said full details of more actions will be announced in September.
The nation’s second-largest automaker said the cuts are an effort to match inventories to demand and avoid costly incentives. The plan also reflects reduced expectations for big trucks and sport utility vehicles considering high gas prices, the company said.
The new production plan will result in downtime this year at assembly plants in St. Thomas, Ontario; Chicago; Wixom, Mich.; Louisville, Ky.; Wayne, Mich.; St. Paul, Minn.; Kansas City, Mo.; Norfolk, Va.; and Dearborn, Mich., Ford said.
The Wall Street Journal, citing unidentified sources, reported Friday that Ford is considering shutting down more factories and cutting salaried jobs and benefits by 10 percent to 30 percent.
Ford spokesman Oscar Suris declined to comment on the report.
Company officials would not say what specific impact the production cuts would have on workers. In general, hourly workers placed on temporary layoff receive 95 percent of their wages through state unemployment benefits and a supplement by Ford.
The United Auto Workers had no immediate comment on the announcement.
Ford shares dropped 20 cents, or 2.45 percent, to $7.97 in morning trading on the New York Stock Exchange.
