Published June 21, 2005
DETROIT – Ford Motor Co. (F) slashed its full-year earnings outlook on Tuesday and said it was planning more job cuts and belt-tightening measures to offset its slumping U.S. vehicle sales.
The second-largest U.S. automaker, which has warned that its core automotive operations may not be profitable this year, said its full-year profit outlook was being cut to a range of $1.00 to $1.25 per share, down from a previous forecast of $1.25 to $1.50.
In addition to the elimination of 2005 bonuses for salaried management employees worldwide, Ford said it was also suspending 401(k) matching grants (search) for its salaried workers and planning to cut another 5 percent, or about 1,700, of its salaried jobs in North America.
The job cuts are in addition to 1,000 salaried positions Ford said it was targeting for cuts in April.
Both Ford and its larger cross-town rival General Motors Corp. (GM) have been reeling this year from a dramatic slowdown in sales of their mid- and large-size sport utility vehicles. The fuel-thirsty SUVs, former profit engines for Detroit's automakers, have entered the slow lane in U.S. vehicle sales as consumer sentiment changes in the face of high gasoline prices.
In addition to its planned job cuts in North America, Ford said in a statement that it was "evaluating options for reducing personnel-related costs outside North America." It did not elaborate.