http://www.bloomberg.com/apps/news?pid=newsarchive&sid=asB0nQcKHRV8
Ford, in `Meltdown,’ May Seek Wage Cut, Analyst Says (Update3)
By John Lippert and Jeff Green
Feb. 20 (Bloomberg) — Ford Motor Co. is in a “meltdown” and may ask
the United Auto Workers union to accept reduced pay and benefits
during this year’s contract talks, a labor economist said.
Ford may seek union backing for a plan to cut wages and benefits by 20
percent, said Sean McAlinden, an analyst at the Center for Automotive
Research in Ann Arbor, Michigan. That could lower costs by $1.4
billion annually for four years, McAlinden estimated.
Ford Chief Executive Officer Alan Mulally on Jan. 3 said he would ask
the union’s help in strengthening the company. Ford, the world’s third-
largest automaker, lost a record $12.7 billion last year on plunging
sales of pickups and sport-utility vehicles. The company’s UAW
contract expires Sept. 14.
“If Ford’s market share falls to 10 or 12 percent by this summer, and
if they start to burn cash at twice the rate they’ve planned,
something will have to be done,” McAlinden said at a labor-relations
seminar in Ypsilanti, Michigan. “We’re really, really worried about
Ford.”
Ford captured 15.2 percent of U.S. sales in January, about 10 points
below its annual level a decade ago. Ford spokeswoman Marcey Evans
declined to comment on the company’s goals for the contract talks. UAW
spokesman Roger Kerson declined to comment.
(snip)