Ford Will Cut Deep

Cox News Service reported that Ford Motor Co.'s plan to cut 4,000 to 5,000 salaried jobs in North America is probably only the first milepost on the road away from the automaker's troubles. In the next few months, analysts say Ford is likely to cut its hourly work force as well, seek price cuts from its suppliers and eliminate shifts at its manufacturing facilities.

CFO Martin Inglis said Friday that Ford plans to unveil a more extensive restructuring plan at the end of the year, adding that "nothing is off limits."

"It is a very difficult competitive environment," Inglis explained. "The whole industry is struggling."

Ford spokesman Nick Sharkey said 75 percent of the employees involved in job cuts will be offered early retirement packages, while the employees who aren't of retirement age will be offered enhanced severance packages. He offered few details about the plan but said Ford will begin making offers to employees in mid-October.

The job cuts account for 10 percent of Ford's salaried work force.

The automaker's latest moves come on the heels of two massive Firestone tire recalls, a lawsuit settlement involving problems with its ignition systems and a management shake-up. On top of the job cuts and earnings warning from Ford, the three major credit rating agencies warned of possible downgrades for the funding arms of Ford and General Motors.

Ford Motor Credit and General Motors Acceptance are among the biggest issuers in the high-grade corporate bond market, with $153 billion and $131 billion in debt outstanding, respectively, as of June 30.

Ford plans to take a charge of $700 million, or $0.40 a share, in the fourth quarter to cover the costs of its cuts, which it said will be achieved largely through retirements. The automaker also warned that its earnings in the second half of the year would fall sharply below expectations.

The company cut its full-year earnings estimate to $0.70 a share, excluding one-time items, from a previous range of $1.25 to $1.35 a share.

Ford's stock fell on the above news, losing $1.77 to $21.70. Shares of rivals General Motors and DaimlerChrysler also fell. The former closed at $59.47, off $3.10. The latter lost $3.25 to close at $43.75