Anxiety builds over Ford's next round of job cuts

One-third of company's white-collar workers at risk, paper says


DETROIT - Anxiety is growing about the shape and size of Ford Motor Co.'s next round of cost and job cuts, which executives have promised will be announced by the end of the year, as at least half a dozen spokespeople were dismissed this week.

The Wall Street Journal reported yesterday that white-collar job cuts were discussed at a manufacturing division meeting last month. Workers said the cuts could be as steep as 30 percent of the salaried work force, or more than 10,000 jobs - nearly a third of Ford's white-collar employees, the newspaper reported.

According to news reports, Ford spokesman Oscar Suris declined to confirm the targets published in the Journal, but he reiterated that the company is working to address competitive challenges, such as its ability to make more cars and trucks than people want to buy.

"We have operating challenges that include our cost structure and excessive production capacity, and we have plans to address that," Suris told the Associated Press. Asked in a conference call Tuesday whether the company was looking at firings or "involuntary separations," Chief Financial Officer Don Leclair answered: "We're still working our way through that."

Two days later, at least half a dozen spokespeople were dismissed, said a spokesman who asked not to be identified.

What Ford is going to do about its problems is not yet clear. Leclair said the plan is still being developed, and will be announced as decisions are made, all of which should come before the year is out.

"It's really the same plan. There's nothing fundamentally different. We just need to do more and do it faster," he said.

What that has meant is cutting jobs, closing plants and developing new cars and trucks that consumers want to buy.

Ford cut 1,000 salaried jobs in April and in June announced plans to shed 1,700 more.

Other moves already announced include eliminating management bonuses this year, suspending 401(k) matches for salaried employees and a 10 percent cut in contract services.

While it seems at times as if Ford has been cutting jobs non-stop since 2002, the Dearborn automaker currently has more employees than General Motors Corp., the world's largest automaker.

That could change if Hertz Corp. becomes a stand-alone business, but Ford appears heavily staffed compared with downtown Detroit rival GM, which has more revenue than Ford, including Hertz.

Ford has earned more than expected so far this year, but it has not indicated that it will post significant earnings in the second half of the year. In April, Ford backed away from the goal set in 2002 to earn $7 billion before taxes in 2006. It has not given investors a sense of what its profit might be next year.

In May, Ford's credit rating was cut to junk status by Standard & Poor's Corp. for the first time.

Along with the continued white-collar job cuts, sooner or later, Ford will have to make cuts to its manufacturing operations, which primarily employ unionized hourly workers.

The company also finds that its suppliers are weakened by higher prices for raw materials and lower sales to automakers.

And lower long-term interest rates are making obligations to future retirees look more expensive on the company's balance sheet.

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