Ford to slash salaried-employee costs by 15 percent

[Omaha Steve]

http://www.ohio.com/news/top_stories/19592904.html

Dismal sales in pickups, SUVs behind cost-cutting as consumers shift to fuel-efficient cars

By Bill Koenig
Bloomberg News

Published on Friday, Jun 06, 2008

Ford Motor Co. plans to reduce salaried-employee costs by 15 percent as declining U.S. sales extend losses at the second-biggest U.S.-based automaker.

The cuts will be made by Aug. 1, Ford told employees in an e-mail from Mark Fields, chief of the Americas division. The e-mail was confirmed by spokeswoman Marcey Evans. The reductions include eliminating contract workers and not filling open jobs, she said.

Ford is trimming again after slashing its salaried work force by about a third in the past two years to 23,700.

The automaker last month dropped its target to return to profit next year, as consumers shift from pickups and sport-utility vehicles to more fuel-efficient cars while average U.S. gasoline prices approach $4 a gallon. Ford's U.S. sales fell 11 percent through May.

The automaker ''faces a need to align costs with lower sales in a shrinking market,'' Standard & Poor's analyst Efraim Levy wrote in a report. ''Even with expected savings, we see North American losses in '09.''

The company ''will need to make additional reductions in U.S. automotive personnel and other salaried-related costs,'' Chief Executive Officer Alan Mulally said in a memo to employees on May 22, the day Ford retreated from the 2009 profit target.

Ford has lost $15.3 billion the past two years, mostly because of deficits in North America.

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