Ford Motor Co. plans to cut 4,000 jobs

The Associated Press
Saturday August 18, 2001

DETROIT — Ford Motor Co. plans to slash between 4,000 and 5,000 white-collar jobs in North America by the end of the year, a high-ranking Ford executive told The Associated Press on Friday. 

The employees will be offered “very good” early retirement packages, said the company official, speaking on condition of anonymity. The cuts account for about 10 percent of the automaker’s salaried work force in North America. “We’ve become much more efficient and the jobs are not needed anymore,” the executive told the AP. “It’s an incredibly competitive market and the economy has slowed.” 

Ford, the world’s second largest automaker, was to make the announcement Friday. 

The source said he expects all the people who are leaving to be gone by December. Further details were unavailable. 

Once thought to be in a position to overtake General Motors Corp. as the world’s leading automaker, Ford’s momentum slipped into reverse last August with the recall of 6.5 million Firestone tires, many of which were installed as original equipment on its popular Ford Explorers. 

Adding to Ford’s woes were disappointing showings in two influential industry studies. Ford assembly plants were shown to be last among the U.S. automakers in quality in the J.D. Power initial quality study, and while still first among domestic car companies in productivity, the Harbour Report found Ford’s lead diminishing. 

In the second quarter that ended June 30, Ford lost $752 million in large part due to the costs of replacing 13 million Firestone tires and restructuring charges involving Mazda Motor Corp., of which Ford owns a one-third interest. 

The automaker was expected to take a charge of about $1 billion against its third-quarter earnings to cover the initial cost of the job cuts, The Detroit News reported. 

Ford management also has begun reviewing the possible delay of some planned vehicle models, which would lower the company’s design and engineering costs, The New York Times reported. 

Shares of Ford were up 92 cents, or more than 4 percent, to close at $23.47 in trading on the New York Stock Exchange on Thursday. 

The yearlong economic slowdown has been hard on automakers and other companies struggling with slumping demand. To cope, they have scaled back production and capital investment and laid off workers. In July, the unemployment rate held steady at 4.5 percent as businesses cut fewer workers than the month before. 

In January, DaimlerChrysler AG announced an aggressive restructuring program at its U.S.-based Chrysler division that would result in the loss of 26,000 jobs over the next three years, about 20 percent of the company’s North American work force. 


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