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American Morning

Ford Looks to Slash 5,000 White-Collar Jobs

Aired August 17, 2001 - 09:10   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Their slogan used to be "Quality is Job One," but today Ford will be talking about job cuts -- and a lot of them. The No. 2 automaker plans to slash as many as 5,000 white- collar jobs from its payroll.

CNN's Peter Viles joins us now from New York with the details -- good morning, Peter.

PETER VILES, CNN CORRESPONDENT: Good morning, Kyra.

That's right. Ford has announced it will cut 4,000 to 5,000 white-collar jobs in North America, salaried jobs. So these are not factory workers. They will spend $700 million to do that. They say they are going to do it on a voluntary basis. So if you cost this out, it sounds like Ford is willing to spend about $150,000 per worker to convince these folks to take, essentially, early retirement.

So they're not talking layoffs -- or at least they say they are not talking layoffs yet. They want these people to come voluntarily. Now, typically, when something like this happens, Wall Street sometimes like it. But in early trading today, Ford shares are down very sharply. And that has nothing to do with the job cuts.

Ford also announced this morning that its earnings will come in way, way below what Wall Street is expecting. Wall Street knows how tough the economy is right now. Analysts were expecting Ford to make $1.20 a share this year. Ford came out this morning and said: You don't know how bad it is. We are going to earn just 70 cents a share.

Lower sales, higher costs of sale and some expensive warranty programs, particularly on the Ford Windstar, are cutting into Ford profits -- a very big disappointment this morning for Wall Street. Even before the market is open, Ford shares are down in pretrading -- Kyra.

PHILLIPS: Peter Viles, thanks so much.

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