In a move sending chills down the United States' automobile industry, Ford Motor Co has decided to slash its workforce by more than 25 per cent and shut down several plants in the country and overseas by 2012.
Some 30,000 jobs will be folded over a six-year period and plants at several locations in the US and Canada will be closed, the country's second-largest automaker said on Monday.
Fourteen manufacturing sites, including seven assembly plants, would be shut down, it said.
The news of the radical trimming of workforce and manufacturing structure saw Ford's bonds rise and shares gaining 6 per cent on Wall Street.
Last November, Ford rival General Motors had announced it was laying off some 30,000 workers and shutting down a dozen plants. Both American automakers are struggling to make ends meet facing increased costs on pension and healthcare and tough competition from the Japanese.
Ford's restructuring will idle plants in St Louis, Atlanta, Michigan, Ohio and Canada which would reduce some 26 per cent of its capacity by the end of 2008. Material costs would also be cut by $6 billion over a five-year period.
In the face of increased competition, Ford has announced it seeks to roll out more fuel-efficient hybrid vehicles and small cars.
"We must reduce capacity in North America," chairman and chief executive Bill Ford said. "From now on our products will be designed and built to satisfy customers, not just fill a factory."
Market and economic analysts were divided on the decision of Ford to slash its operations with some saying this was the only way to move forward.
Others questioned whether Ford could make ends meet even with the cuts in place.
With Ford's marketshare slipping 17 per cent by the end of 2005, some analysts feel the Detroit automaker would have to slash more in the coming months.
Union leaders, who will have to negotiate a new contract with Ford in 2007, have called the restructuring plans 'extremely disappointing' and said negotiations will be 'all the more difficult and all the more important.'
