Summary
This filing is an amendment to a previous Form 8-K, providing updated and estimated lifetime costs associated with Ford's accelerated restructuring plan, known as the "Way Forward" plan. The company has now quantified the total estimated costs at $11,182 million. This significant figure includes substantial charges for personnel separations (Jobs Bank Benefits and reduction programs), pension curtailments, and fixed asset impairments, including those related to plant idlings in the U.S. Investors should note that the majority of these costs, $9,982 million, were already accrued in 2006. The remaining balance is expected to be recognized in the first quarter of 2007, primarily for salaried personnel reductions. The company also anticipates a curtailment gain related to postretirement employee benefits for hourly personnel separations occurring in 2007. While a large portion of the total costs are non-cash (impairments, pension charges), the personnel-related programs represent significant cash expenditures.
Key Highlights
- 1Ford has estimated the total lifetime costs for its accelerated restructuring plan (Way Forward) at $11,182 million.
- 2Key cost components include $5,960 million for Jobs Bank Benefits and personnel-reduction programs.
- 3Pension curtailment charges are estimated at $2,741 million, and fixed asset impairment charges at $2,200 million.
- 4U.S. plant idlings contribute an estimated $281 million, primarily in fixed-asset write-offs.
- 5$9,982 million of the total estimated costs were accrued in 2006.
- 6The remaining costs, mainly for salaried personnel reductions, are expected to be accrued in Q1 2007.
- 7A curtailment gain on postretirement benefits is expected in 2007 for hourly personnel separations.