Ford May Decide on Plant Closures Soon

Ford Motor Co.’s board will meet this week to consider closing as many as four North American assembly plants after two straight quarters of losses in its largest market, according to people familiar with the situation.

Executive Vice President Mark Fields, who was put in charge of operations in the Americas two months ago, will propose which plants should be shuttered during the meeting, which will be held Wednesday and Thursday, the sources said. In October, Ford Chief Executive William Clay Ford Jr. said Fields would “make recommendations for my review by December.” A decision may be announced next month.

The closings come as Ford and General Motors Corp., the two largest U.S. automakers, lost a combined $6.3 billion in their North American auto operations during the year’s first nine months. Two weeks ago, GM CEO Rick Wagoner said he would eliminate 30,000 jobs and shut down all or part of 12 facilities by 2008.

“To the extent that GM takes any action to get more competitive, that has to influence the urgency of Ford’s strategy,” said John Casesa, a Merrill Lynch & Co. analyst in New York.

GM directors also gather this week in one of two meetings held annually that include sessions without Wagoner. After Wagoner announced a healthcare deal to save $1 billion annually in October and the plant closings last month, the board can’t afford to be complacent, Casesa said.

To survive, GM and Ford will need to eliminate unprofitable brands, vehicles and dealerships, as well as wages and benefits for United Auto Workers union members before increasing investments on the products that are left, he said.

Closing four factories would leave Ford with 14 North American assembly plants, down from 21 as recently as 2004. After Bill Ford took over in 2001, he announced the company’s first plant closings since the early 1980s. Trade publication Automotive News reported Monday that Ford may close more than eight plants, including parts and engine operations. It is likely to close five vehicle-assembly plants, Automotive News reported, citing a person familiar with the plan.

GM’s directors also may consider whether they’ll allow billionaire Kirk Kerkorian, 88, to appoint a representative to the GM board. Kerkorian owns 9.9% of GM’s shares.