Ford Cuts Deeper as Sales Slide

23 June 2005

US carmaking giant Ford Motor Company is looking to slash more jobs as sales slump and profits sag.

It is planning to axe another 1,700 workers in North America - affecting the Ford, Lincoln and Mercury brands - on top of the 1,000 job losses it announced in April. The cuts are directed chiefly at management roles.

So far Ford has refused to be drawn on future prospects for its 70,000 employees in Europe. However, it said ominously that it was "evaluating options for reducing personnel-related costs outside North America".

The number two US auto maker has trimmed its 2005 earnings forecast for the second time this year to between $1 and $1.25 (€0.82 - €1.03; £0.54 - £0.68) per share and saw its sales slide 5.7% in the first five months of the year. This compares with an industry-wide decline of one percent over the same period.

Ford and its rival General Motors, the US number one, are both losing market share under the weight of competition from overseas manufacturers.

They also face a worsening product mix as American consumers turn away from gas guzzling sports utility vehicles, rising raw material costs. Another aggravating factor is the soaring cost of providing healthcare for US employees.

Data sourced from Wall Street Journal Online; additional content by WARC staff