Ford takes job cuts to 35,000

Auto giant Ford has said it is to close five plants in North America, with the loss of about 20,000 jobs.

Ford's empire

345,000 staff

40 countries

World's 2nd largest carmaker

3Q losses of $692m

Together with the job cuts that have already been announced, it means Ford will have cut 35,000 jobs during 2001 and 2002 - 10% of its workforce.

Its production capacity in the US will be cut by 16% to 4.8m vehicles.

Ford's new chief executive, William Clay Ford Jr, said the steps being taken were "painful but necessary."

New leadership

The announcement was the first opportunity for Ford's new leader to show how he wants to run the company, after ousting his predecessor Jacques Nasser at the end of October.

William Clay Ford: 'If we don't (succeed), I don't get paid'

"For most of the last decade the Ford Motor Company was on a roll," he said, but he added that Ford's success may have led to underestimate the strength of rival car makers, and the impact of the global economic slowdown."

He said the company had "strayed from what got us to the top of the mountain, and it cost us greatly."

Mr Ford said the firm needed to get "back to basics" and he emphasised that it must improve its build quality.

He also revealed that his income would depend on the fortunes of the car maker.

"I have asked the board to pay me no salary, bonus or long-term compensation except for options," he said.

"If the company succeeds, I will do well, and if we don't, I don't get paid."

Squeezed

Of the plants being closed, the ones at Edison and Oakville build pickups, while the Hazelwood plant builds the Ford Explorer sports utility vehicle.

Ford models being dropped

Ford Escort

Mercury Cougar

Mercury Villager

Lincoln Continental

The two other plants being shut - at Cleveland and Dearborn - make car parts.

Ford said 11 other plants were to undergo 'major restructuring', and that the production of four of its models would be halted.

The company said it would take a charge of $4.1bn during the fourth-quarter cover the cost of the restructuring plans, but it said the measures being taken were aimed at improving profits by $9bn by the middle of the decade.

Ford, the world's number two vehicle maker, is expected to unveil its first annual loss since 1992 later this month after losing $1.4bn in the six months to the end of September 2001.

Ford has been squeezed by increased competition from foreign auto makers as well as domestic rivals General Motors (GM) and Chrysler.

GM success

A day ahead of Ford's meeting, rival GM raised its profits forecast for 2002 by more than a dollar per share above analysts' expectations.

Ford plants being closed

Edison, New Jersey

Hazelwood, Missouri

Oakville, Ontario

Cleveland, Ohio

Dearborn, Michigan

Ford's vehicle sales in the United States slid by about 5.5% in 2001 compared to the previous year.

An expensive tyre-replacement programme on pre-2002 Ford Explorer sport-utility vehicles (SUV) has also bitten into its profits.

Earlier on Friday, Ford set it was setting its first-quarter dividend at 10 cents a share, down from 15 cents in the previous quarter.

On Wall Street Ford shares closed up 21 cents at $15.50 on hopes the restructuring measures would improve profits.