DEARBORN, Mich. (AP) – Ford Motor Co. said Friday it plans to cut 10 percent of costs related to its salaried automotive work force by the end of the year. A Ford source said up to 2,000 white-collar jobs could be eliminated.
The cost-cutting effort comes as the world’s No. 2 automaker tries to keep its restructuring plan, launched a year and a half ago, on track. Ford said earlier this week it slashed expenses by $1.3 billion in the second quarter; its goal is to reduce costs by $2.5 billion by the end of 2003.
Ford officials declined to give a specific number of jobs targeted in the plan announced Friday, but a company source speaking on condition of anonymity said the number of jobs cut could reach 2,000.
Chief operating officer Nick Scheele alerted Ford workers worldwide of the new cost-cutting plan in an e-mail Friday morning.
“Despite this excellent work, we still face uncertain economies around the globe and a fiercely competitive marketplace,” Scheele said in his e-mail. “As a result, it’s imperative that we continue looking at all of our costs globally to achieve even higher levels of efficiency and cost competitiveness.”
Scheele said some of the 10 percent savings will be achieved through attrition, hiring freezes, elimination of overtime and a reduction in agency and supplemental workers.
“However, where these actions cannot fully meet the targets, we will have to reduce our salaried personnel structure to address the balance,” Scheele said.
Ford has about 79,000 salaried automotive workers worldwide.
Ford officials said in April they were intensifying efforts to slash the company’s $30 billion budget for costs not directly related to vehicles by as much as 20 percent over the next two years. The company said the effort is part of a goal to improve profits by $9 billion by mid-decade.
Earlier this week, Ford said it earned $417 million in the second quarter, a 27 percent decline from a year ago. The automaker said it expects a loss of 15 cents in the July-September period, reflecting lower production because of high inventories.
Ford posted a profit of $896 million in the first quarter. It’s trying to rebound from $6.4 billion in losses the past two years.
In trading on the New York Stock Exchange, Ford shares rose 16 cents to close at $10.99.
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On the Net:
Ford Motor Co.: http://www.ford.com
AP-ES-07-18-03 1840EDT
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