Ford Slashes 10,000 More Jobs, Two Plants

(AP) Ford Motor Co. said Friday that it plans to cut 10,000 more salaried jobs, offer buyouts to all of its U.S. hourly workers and shut down two more plants as it expands its restructuring plan designed to rein in expenses and restore the struggling automaker to profitability.

The company said in a news release that it would shutter a stamping plant in Maumee, Ohio, in 2008 and an engine plant in Essex, Ontario, in 2007. That is in addition to previous plans for 14 plant closures.

In addition, Ford said an assembly plant in Norfolk, Va., will close in 2007, a year earlier than previously announced and will see a shift reduction in January. Also, an assembly plant in St. Paul, Minn., which is scheduled to close in 2008, will have a shift reduction in 2007.

Ford said it would complete its cuts of 25,000 to 30,000 hourly jobs by the end of the 2008, four years ahead of its previous target.

Ford said the new cuts in salaried jobs are in addition to 4,000 already eliminated in the first quarter of this year. The combined 14,000 jobs cuts represents about a third of Ford's North American white-collar work force.

By 2008, North American factory capacity will be reduced by 26 percent compared to 2005 levels, Ford said in the release.

The company said the plan would cut about $5 billion in operating costs, mainly by offering early retirement and buyout packages to all hourly workers and to white-collar employees. Ford plans to expand buyout and early retirement offers to the company's U.S. hourly work force of more than 75,000 as part of the plan. The union said that the blue-collar buyout offers range as a high as $140,000.

Ford said it expects to achieve full-year profitability in its North American automotive operations no earlier than 2009. The company had previously said it expected a profit on North America in 2008.

The company also plans to suspend the quarterly dividend on its common and Class B stock in the fourth quarter of this year.

Ford shares fell 51 cents, or 5.6 percent to $8.58 in premarket trading on Friday. Its shares have traded in a 52-week range of $6.06 to $10.09.

Ford lost $1.4 billion overall during the first half of this year and is under pressure from Wall Street to make further cuts and roll out new cars and trucks more quickly.

In July, the company said it would accelerate its "Way Forward" restructuring plan, which when introduced in January called for the up to 30,000 job cuts as well as closing 14 facilities by 2012.

"These actions have painful consequences for communities and many of our loyal employees," Chairman Bill Ford said in the restructuring release. "But rapid shifts in consumer demand that affect our product mix and continued high prices for commodities mean we must continue working quickly and decisively to fix our business."

The company indicated that it is ready to accept a smaller slice of the market, focusing on profitable sales instead of sheer volume. It said that, with investments in new products and quality improvements, it expects market share of about 14 to 15 percent going forward.

This year, the company is forecasting Ford, Lincoln and Mercury market share in the low-16 percent range. The country's second-largest automaker has seen its market share decline steadily in recent years from about 26 percent in the early 1990s.

"Turnarounds of this magnitude succeed when capacity and costs are aligned with a realistic expectation of demand," Chief Executive Alan Mulally said in a statement. Mulally, who was named to the post last week, led a turnaround at the commercial jetmaking division of Boeing Co.

The company also said it would roll out new or significantly upgraded cars and trucks in 70 percent of its Ford, Lincoln and Mercury brands, expanding in growing areas such as car-based crossovers. At the same time, Ford said it will try to maintain its lead in the truck segment by introducing a new F-150 pickup truck that will go on sale in 2008.

Ford has acknowledged a need for drastic changes in its product lineup. Like other U.S. automakers, its bottom line is heavily dependent on high-margin trucks and large SUVs, but recently consumer preferences have shifted toward more fuel-efficient vehicles. Ford says the speed of that shift caught it by surprise.