Ford Motor Co said yesterday that it plans to cut 10,000 more salaried jobs, offer buyouts to all hourly workers and shut down two more plants as part of a dramatic 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, next year. In addition, an assembly plant in Norfolk, Virginia, will close next year, a year earlier than previously announced.
Ford said it would complete its cuts of 25,000 to 30,000 hourly jobs by the end of 2008, four years ahead of its previous target.
Ford said the new salaried position cuts are in addition to 4,000 positions eliminated in the first quarter of this year.
The combined 14,000 job 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 last year's levels, Ford said.
The company said the plan would cut about US$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 US hourly work force of more than 75,000 as part of the plan.
Ford lost US$1.4 billion 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 pledged to 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 a news 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 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 US 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 due to rising gasoline prices. Ford says the speed of that shift caught it by surprise.
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