- The Washington Times - Thursday, October 20, 2005

DEARBORN, Mich. (AP) — Ford Motor Co., its profits dragged down by poor performance in North America, will announce “significant” U.S. plant closings and layoffs in January — another heavy blow to the nation’s autoworkers.

The company reported a third-quarter loss of $284 million yesterday.

Ford and other U.S. automakers have been hurt by competition from Asia, slumping sales of gas-guzzling sport utility vehicles (SUVs), high health care and materials costs and bloated plant capacity.

Ford Chairman and Chief Executive Officer Bill Ford said he will complete the restructuring plan in December and announce it in January. He said the plan was painful but essential and would affect salaried workers and hourly workers represented by the United Auto Workers (UAW).

“This is not a sacrifice we will ask only the UAW and its members to share. There will be sacrifices throughout the company, top to bottom,” Mr. Ford said in a conference call. “Our industry is beginning a dramatic restructuring which is sorely needed. While the challenges are great, so are the opportunities.”

Ford shares fell 8 cents to $8.39 in trading on the New York Stock Exchange. They have traded in a 52-week range of $8.26 to $15.00.

The nation’s second-biggest automaker lost 15 cents per share for the three months ended Sept. 30 in contrast to a profit of $266 million, or 15 cents per share, in the year-ago quarter.

Revenue for the quarter rose to $40.9 billion from $39.1 billion in 2004.

Wall Street had predicted a loss of 10 cents per share, said analysts surveyed by Thomson Financial. Ford said full-year earnings likely will be at the low end of the current guidance of $1 to $1.25 per share.

Standard & Poor’s Ratings Services, which downgraded Ford’s debt to “junk” status earlier this year, said the company would remain on credit watch with negative implications after yesterday’s announcement. S&P; said it is concerned about Ford’s ability to turn around its North American operations, particularly with falling sales of SUVs, the company’s longtime cash cows, as gas prices remain high.

“For all the progress, we recognize we’re very far from the finish line,” Mr. Ford said. “We need a dramatically different business structure, and we need innovation to drive everything we do.”

Mr. Ford said the Dearborn-based company needs to align its plant capacity with its shrinking U.S. market share, which was at 17.7 percent in the first nine months of 2005 compared with 18.4 percent in 2004. He would not say how many plants need to close, but he said the company will keep enough capacity to meet its future sales goals.

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