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Transportation equipment industry

Ford Calls for US Government Support Amid Detroit Car Industry Crisis

Strategic Insights

— 1 min read

As the Detroit car industry struggles with significant restructuring plans and job losses, Bill Ford, chairman and chief executive of Ford Motor, has urged the US government to provide extra tax breaks to help the industry compete with Asian rivals. This move comes as General Motors, a rival car manufacturer, announced plans for 30,000 job losses, and Ford itself is expected to reveal a restructuring plan in January that may include factory closures and additional job cuts.

Key Takeaways:

  • Ford's chairman and CEO, Bill Ford, called for US government support for the troubled Detroit car industry, citing the need for extra tax breaks on investment in modern factories, training workers, and research and development.
  • Ford is expected to reveal a restructuring plan in January, which may include factory closures and additional job losses, on top of the 4,000 salaried jobs that will be cut by next spring.
  • General Motors set out plans for 30,000 job losses, with the company expecting to record a significant restructuring charge of up to $3bn during the fourth quarter of the year.
  • The poor reception by investors of GM's plan could increase pressure on Ford to impose more drastic cuts.
  • Ford did not repeat previous calls for help with the soaring cost of healthcare, but pointed to state support received by foreign carmakers for their healthcare and R&D costs.
  • Bill Ford emphasized the need for the US government to respond to the economic challenges of globalisation and support the American car industry.

Statistics:

  • 30,000: Number of job losses announced by General Motors.
  • 4,000: Number of salaried jobs that will be cut by Ford by next spring.
  • $3bn: Estimated restructuring charge that General Motors may record during the fourth quarter of the year.
  • 1.32%: Decrease in GM shares yesterday.
  • $23.27: Closing price of GM shares yesterday.
  • 0.24%: Decrease in Ford shares yesterday.
  • $8.34: Closing price of Ford shares yesterday.

Sources:

  • Bloomberg (no date) - "Bill Ford Urges U.S. to Support Detroit Industry Amid GM's Job Cut Plan"
  • The New York Times (no date) - "Ford and G.M. Set to Announce Restructuring Plans"

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