Ford Motor Company plans to conduct involuntary layoffs of salaried employees by August 1, 2008.

It has been told by the company officials that, Ford would cut 10 to 12 percent or more than 2,000 employees this summer.

Ford spokesman, Mark Truby said, “We’re not going to comment on internal discussions we’re having with our employees. As soon as we finalize some of these details, we’re going to tell our employees as quickly as we can.”

The severe cut in Ford’s production that has been lowering its 2009 profitability goal, has finally compelled the automaker to reach such a tough decision. The sales have slumped severely, especially for large pickups and SUVs.

With the cuts in work force, the company is expecting to restructure the slumped sales, which is mainly struggling due to high gas and raw material prices.

In the second quarter of 2008, Ford has reduced its production by 15 percent as compared to the same quarter last year. It has been expected that, the third and fourth quarter will account for a fall in production as much as 20 percent and 8 percent respectively.

The employees who will be terminated, would not be offered voluntary buyout packages with financial or early retirement incentives.

Earlier, Ford had terminated 11,000 salaried workers in North America since the end of 2005, by offering voluntary buyouts and early retirement incentives. Ford had a total of 23,700 salaried workers at the end of 2007. The large number of cut has reduced its full-time salaried workers.

Ford Motor Company is all set to build its new global car in Mexico for the United States market. The company has confirmed the name of the new model, the Fiesta.

But the company’s officials stayed away from commenting on the news except to say they are planning to bring the car to North America by 2010. They have not confirmed where the car will build in the United States.

Reportedly, the new three and five-door hatchback version will hit the markets in Europe and China by the end of this year.

According to Ford Chief Executive Alan Mulally, “With the all-new Fiesta, we want to create a world standard for small car quality, design and comfort in a vehicle that is as exciting to drive as it is to look at. We believe this all-new model will attract a whole new generation of small car buyers.” 

Other versions of Fiesta, including a four-door sedan, will also reach the auto markets in North America, Asia, South Africa and Australia by 2010.

The company has sold a total of 12 million of its original Ford Fiesta since the vehicle was introduced in 1976. It was only sold in the U.S. from 1978 to 1980. Ford Fiesta has been a familiar name in the European, Asian and South African markets.

Ford Motor Company has announced to launch the new hatchback version of the Fiesta in North America by 2010.

The car will enter along with the sedan in the North American market. Ford will build the hatchback version and sedan at its Cuautitlan plant in Mexico.

The plant is currently the manufacturer of the F-Series pickups for the Mexico market. But, it will soon transform into a plant that will build small cars for all of North America. The company officials confirmed that after the transformation is over, the pickups for the Mexico market will come from the U.S. plants.

The Cuautitlan plant in Mexico which builds 1-4 engines, will also make diesel engines for light and medium-duty trucks for the global market. Ford also has another plan in future to build a transmission plant in Guanajuato as part of a joint venture with German supplier Getrag.

The new multi-development effort accounts a $3 billion U.S. investment It is expected that the move will create approximately 4,500 jobs in Ford.

According to Ford’s insiders, the Fiesta will give Ford a fuel-efficient competitor against the cars such as Honda Fit and Nissan Versa. But, it is yet to be decided which configuration of the hatchback car will be built for the North American market.
Ford CEO Alan Mulally said, “Ford is absolutely committed to leveraging our global assets to accelerate the shift to more fuel-efficient small cars and powertrain technologies that people really want and value.” He further added, “Our investments in these facilities in Mexico are part of our plan to further realign our manufacturing capacity in line with the introduction of more small cars and crossovers.”

Ford is expected to increase its production in Mexico to nearly 500,000 vehicles and 330,000 transmissions by 2012. Ford’s current capacity is about 296,000 vehicles.