By Christina Rogers
Ford Motor Co. is cutting about 700 jobs at its small-car
factory in southeast Michigan, the auto maker's first major U.S.
manufacturing layoff since 2009 as Americans shun smaller vehicles
amid low gasoline prices.
The workers were notified on Thursday of the workforce cuts at
the plant, which builds Ford's compact Focus, as well as electric
and hybrid models. The layoffs will begin at the end of June and
the Dearborn, Mich., company said it could reassign many of the
employees.
The action takes place months before Ford executives kick off
labor negotiations with the United Auto Workers union. While UAW
officials will push for more compensation, the pain in the U.S.
small-car market--also faced by General Motors Co. and Fiat
Chrysler Automobiles NV--is a reminder of the cyclical nature of
the American auto industry even in the best of times.
As buyers, taking advantage of low gas prices, shift toward
larger, roomier trucks and sport-utility vehicles that typically
consume more gasoline, auto makers are scrambling to build as many
of those profitable vehicles as they can. GM, for instance, is
proposing to add workers at an SUV plant in Texas.
Earlier this year, Ford said it would hire 1,500 workers at its
truck factories in southeast Michigan and near Kansas City, Mo., to
boost production of its F-series pickup trucks.
"While today's announcement of a shift reduction at our Michigan
Assembly Plant is unfortunate, it is not completely unexpected,"
said Ford-UAW President Jimmy Settles. "We are reminded from time
to time that our industry is cyclical and volatile to market
conditions."
Small vehicle sales fell to approximately 18.5% of U.S. retail
car sales in the first quarter of this year, compared with 20%
during the same period last year. The result marked the category's
lowest first-quarter retail share of sales since 2009.
Detroit's Big Three have been stuck with rising inventories of
their smaller, more fuel efficient cars. Ford said in a statement
that its making the move to better "match production with
demand."
Inventory levels were healthier for the Ford Focus compact car,
with dealers having about a 65 days' supply on their lots, but
March sales of the car tumbled, falling 14.5% over a year earlier,
according to researcher Autodata Corp. Sales of the GM's
similarly-sized Chevy Cruze fell 11% in March over the same month a
year ago.
GM in November cut production and laid off workers at two
Michigan assembly plants to trim inventories of slower-selling
passenger cars.
Write to Christina Rogers at christina.rogers@wsj.com
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