Ford to cut salaried costs by 15%
4:07p ET June 5, 2008 (MarketWatch)
SAN FRANCISCO (MarketWatch) -- Ford Motor Co., following reports of imminent white-collar job cuts a week ago, confirmed Thursday that it is looking to shed 15% in salaried-related costs in an effort to get back on track toward profitability.
"There are no absolute numbers in terms of the salaried employee separations expected," Ford spokeswoman Marcey Evans said. "Each functional organization has a cost reduction target and the management of that organization is determining how to meet it in light of their specific business needs."
She explained that Ford will work toward those goals by cutting salaried, agency and contract workers, along with attrition and the consolidation of open positions.
Last week, the Detroit News reported that the Dearborn, Mich.-based company could be handing out pink slips to 2,000 salaried employees and taking a hard look at merit pay increases. Evans said the next round of cuts will be involuntary. See full story.
Standard & Poor's equity analyst Efraim Levy said he believes that the cuts won't be enough for Ford to reach profitability in 2009, a goal from which the automaker recently backed away.
"This action by itself may not be sufficient to achieve the automaker's aims if [Ford] is unable to stem volume declines," he said.
Ford on Wednesday reported a 16% drop in May U.S. sales to 217,998 cars and trucks, down from 259,470 a year earlier. The car side fared well, but trucks were slammed, with the long-time best-selling F-Series giving up its top spot to cars from Toyota Motor Corp. and Honda Motor Co. . See full story.
Ford's stock finished down 1% at $6.40.