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Friday, 11 January, 2002, 22:46 GMT
Ford takes job cuts to 35,000
ford share price
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.

Ford CEO William Clay Ford
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.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Stephen Evans
"We don't know if this is a coherent plan or a new management thrashing around in the dark"
Ford Chairman & Chief Executive Bill Ford
"Our success led us to under estimate the economic downturn"
Former director of Ford Europe, Karl Ludwigsen
"It is not that long ago we we were talking about Ford overtaking GM"


Background
See also:

12 Jan 02 | Americas
Ford workers brace for closure
11 Jan 02 | Business
Ford hit by 'perfect storm' of woes
11 Jan 02 | Americas
End of road for luxury car
05 Dec 01 | Business
Ford warns of steep losses
03 Dec 01 | Business
Ford cuts more jobs as sales flag
17 Oct 01 | Business
Ford reports huge loss
11 Jan 02 | Business
Automotive Empires
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