Bye Bye Ford Models

Ford is ending production of the Ford Escort, Mercury Villager and Mercury Cougar. And it is cutting dividends to shareholders, suspending bonuses for managers and will stop matching contributions for 401(k) savings plans for salaried employees. Chairman William Clay Ford Jr. will forgo his salary and bonuses and accept only stock options.

The changes are designed to cut expenses in North America to shore up the company's finances and provide funds for product development, Nick Scheele, Ford's new chief operating officer, said recently. Analysts said the company must develop models that will attract a new generation of American car buyers and rebuild its reputation for quality, which was badly damaged after a series of highly publicized recalls and a fight with Bridgestone/Firestone Inc. over tires used on the Ford Explorer.