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Ford Motor Company confirmed today that it is offering a voluntary separation programme for salaried employees.
By the end of the year, the No. two U.S. vehicle maker will reduce the number of salaried positions in North America by 4,000 to 5,000, largely through retirements. The company expects to record a one-time, after-tax charge of about $US700 million, or 40 cents per share, in the fourth quarter to cover the cost of the programme.
Ford also expects to report an after-tax, non-cash charge in the third quarter of approximately $200 million, or about 10 cents per share, resulting mainly from the write-down of certain investments in e-commerce and automotive-related ventures.
In addition, Ford now expects full-year 2001 earnings to be about 70 cents per share, before the one-time charges. The present analyst consensus for the year is $1.20. The reduction is mainly attributed to lower volume, higher marketing expenses and costs for ‘customer satisfaction initiatives’ such as the Firestone tyre recall and the TFT ignition module replacement programme.
In a conference call with analysts, Ford chief financial officer Martin Inglis said that about 200 of the voluntary job cuts would be in Canada but he dismissed suggestions of plant closures as ‘speculation’.
“We have no specific near-term plans on plants though nothing is off-limits,” Inglis said in response to a journalist’s question.
There were no plans to slash the new product programme (as has been speculated by some pundits) though Ford did need “further reduction” in its material costs, Inglis added.
Responding to another question, Inglis denied the white collar job cuts were a result of the Firestone or TFT issues currently facing the company.
“The biggest reason this is going on is because we’re in a very difficult competitive environment,” he said.
“The whole industry is struggling and the economy is sputtering a little.”
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