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Source: The Wall Street Journal
"Ford, UAW to Meet to Discuss Car Production Increase"

Ford, UAW to Meet to Discuss
Car Production Increase
June 11, 2008 2:40 p.m.
DETROIT -- Ford Motor Co.'s top manufacturing and labor executives will meet with plant managers and United Auto Worker officials on Friday to discuss plans to boost car output amid rapidly declining sales of pickup trucks and sport-utility vehicles.

Ford's global manufacturing chief Joe Hinrichs, labor affairs head Marty Mulloy and global quality chief Bennie Fowler will attend the "business review meeting," Ford spokeswoman Angie Kozleski said. "This is part of our ongoing communications and a way to share information with the plants and local union leadership."

Ford officials have declined to specify what will be discussed. But people familiar with the talks say Ford will brief the labor leaders on a plan to change some or all production at current pickup and SUV plants over to output of more fuel-efficient vehicles, such as cars and crossovers, which have the attributes of SUVs but are built on car platforms.

The meeting comes three weeks after Ford announced it would slash production of trucks and SUVs, while pledging to increase output of small vehicles that have been selling well, such as the Ford Focus and Ford Edge crossover. The company, which sees a structural shift in market demand amid the recent surge in fuel prices, also abandoned its target of restoring full-year profitability on a pretax basis in 2009.

Other topics at Friday's meeting include the possibility of offering laid-off workers the chance to work in the plant that makes the Focus, a small car that has become Ford's hottest-selling product. There may also be further discussion on adding a lighter truck line to complement the F-150, which has long been the top-selling vehicle in the U.S. but has seen recent sales slide dramatically.

Ford Chief Executive Officer Alan Mulally has endorsed the idea of a lighter truck line. Mark Fields, head of Ford's America's operations, echoed that support this week, telling reporters that the Ranger might be a candidate for the auto maker's global platform approach similar to the Fiesta, a European passenger car to be built in Mexico and sold in the U.S. market.

The Detroit News first reported the meeting earlier Wednesday. It also said, citing unnamed sources, that Ford plans to retool some of its North American plants to produce vehicles being built in Europe, where it is a leader in the small-car segment.

Ford isn't expected to announce details of its manufacturing alignment for several months, though some elements of the plan could be unveiled as early as next month, people familiar with the situation said Wednesday.

Auto Makers Stung by High Fuel Prices

Ford, General Motors Corp. and Chrysler LLC have for more than a decade relied on SUV and pickup truck sales for profits. Those vehicles are quickly falling out a favor with U.S. consumers as gasoline prices top $4 a gallon and the economic outlook remains murky.

In addition to the production cuts announced last month, Ford plans to continue cost-cutting and is now looking to trim its U.S. salaried work force expenses by 15% through involuntary layoffs and other cost-cutting actions.

Other auto makers are also taking steps to adjust their production plans to adapt to the shifting consumer preferences.

GM, the largest U.S. auto maker, last week said it will cease production at four assembly plants in North America that produce trucks or SUVs. GM also committed to moving more quickly to introduce fuel-efficient vehicles.

Chrysler CEO Robert Nardelli told The Wall Street Journal Tuesday that he may have to cut production further in response to falling truck and SUV sales. Chrysler, which relies on SUVs and pickups for the bulk of its sales, began taking steps last year to adjust production and has been idling plants as needed.

Nissan Motor Co. said earlier this week it will modify output at its Canton, Miss., plant to assemble more Altima sedans. It will switch one truck and SUV shift within the plant to Altima production increasing output to 17,000 from 15,000 vehicles per month.
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