Ford Motor Credit on Wednesday said it would restructure its US operations with the loss of about 1,200 permanent and temporary jobs, about 20% of its current staff.
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The move was “to meet changing business conditions, including lower auto sales and the planned reduction in Jaguar, Land Rover and Mazda receivables, and to maintain a competitive cost structure,” the finance unit said in a statement.
The restructuring would affect servicing, sales and central operations and would occur this year through attrition, retirements and involuntary separations.
The unit reported a net loss of US$1.5bn in 2008, a fall of $2.3bn from net income of $775m a year earlier.
On a pre-tax basis, the loss was $2.6bn for the full year, including second quarter 2008 impairment charge of $2.1bn for North America operating leases, compared with earnings of $1.2bn in the previous year.
That charge, a higher provision for credit losses, and higher depreciation expense for leased vehicles were the main reasons for the plunge into the red.
The fourth quarter net loss was $228m, down $414m from a year earlier. A pretax loss of $372m in the fourth quarter, compared with earnings of $263m in 2007.
“The drastic and rapid deterioration in the economy, credit markets and auto sales in 2008 brought unprecedented challenges to Ford Motor Credit. The historic decline in used-vehicle auction prices across the industry affected our North American lease portfolio and led to a second quarter impairment,” chairman and CEO Mike Bannister said in a statement.
“Tough external challenges are expected in 2009.”
