Ford Cutting More Jobs, Extends Losses




(AXcess News) Houston, TX - Ford Motor Co. (NYSE: F) said it was going to close 2 more plants and cut 10,000 salaried jobs while offering buyouts to 75,000 hourly workers in an attempt to turn around losses and remake itself into a lean, more efficient automaker.

Investors didn't take the job cuts and plant closings lightly, pushing Ford's shares down over 16 percent before managing to recover to a loss of 11 percent in mid-afternoon trading in New York.

Ford said Friday that it would be closing an engine plant Windsor, Ontario, in 2007 and a stamping plant in Maumee, Ohio, in 2008, bringing the total plant closings to 16 from Ford's previous figure of 14 plants.

Ford said it would be accelerating its hourly worker's job cuts, eliminating 30,000 jobs by the end of 2008, four years ahead of schedule.

By accelerating the pace of job cuts Ford will have eliminated almost 30 percent of its entire workforce by 2008. Ford currently employs 130,000 workers in both salaried and hourly jobs.

Ford looks to save $5 billion in costs by offering buyouts to its hourly and salaried workers. The buyouts are being implemented because of the business model, Ford Americas President Mark Fields explained. "The fact is," said Fields, "the business model that served us in North America for decades no longer works."

Fields suggested through his comment that high-priced union wages no longer cut it against foreign automakers like Toyota who was opening plants in the US while GM, Chrysler and Ford were facing cutbacks. But the news is not surprising and Ford's move in offering contract buyouts appears to be modeled after General Motors who offered a similar deal to its hourly workers earlier this year.

Bill Ford Jr. said that the accelerated reorganization plan would bring the automaker back to profitability in 2009. He also said that dividends on its common and Class B stock in the fourth quarter of this year would be suspended.