Shares of Ford Motor Co. (NYSE:F)fell more than 6 per cent on Monday as the company announced layoffs and a new round of cost cutting.
Ford shares closed down $1.16 to $17.78 US on the NYSE.
Ford will cut about 600 hourly workers and 30 salaried staff by eliminating a shift at its pickup truck plant in Edison, New Jersey. The plant makes the Ford Ranger compact truck. The cuts, which take effect in early February of 2002, will trim annual production by 84,000 vehicles.
The company also said it will stop making matching retirement plan contributions for 45,000 salaried employees in the United States, and will eliminate merit salary increase for its 2,200 top executives globally.
Ford said it expects the cuts will help it save $300 million U.S. after taxes annually.
"These plant and benefit actions, while painful for our employees, are necessary as we confront a serious situation," said chairman and CEO Bill Ford in a statement. "More tough decisions will follow in the months to come. However, we are confident that by building on our inherent product strengths, we will succeed as the best car and truck company in the world."
There was no immediate word of cutbacks at Ford's Canadian operations.
Ford is also reported to be preparing to issue a profit warning soon.
The car company is expected to announce this week that its fourth-quarter loss is going to be bigger than originally forecast. According to an Associated Press report that cited Ford insiders and internal documents, the company will forecast a loss of 35 cents US per share, or roughly $630 million US.
Thomson Financial/First Call reported that analysts surveyed were expecting a loss of 10 cents a share for the fourth quarter.
In August, Ford announced the layoff of 5,000 white-collar jobs, then about one-tenth of its salaried staff. About 200 jobs were cut in Canada.
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Ford said it had record monthly U.S. sales of its F-Series trucks, the Escape SUV and Windstar minivan.
Hit hard by the recession in the U.S., automakers have aggressively courted buyers, offering incentives such as zero-percent financing.