Ford Motor Company annnounced this afternoon that it was cutting 35,000 jobs worldwide, closing five plants and eliminating four models.
"We strayed from what got us to the top of the mountain, and it cost us greatly," chief executive William Clay Ford Jr. said at the company headquarters in Dearborn, Michigan.
The job cuts include 22,000 in North America. Plants to be closed are in Edison, New Jersey; Oakville, Ontario, Canada; Brook Park, Ohio, near Cleveland; Hazelwood, Missouri, near St. Louis; and the Vulcan Forge plant in Dearborn.
It was not clear how the cuts would affect Ford's European operations, including those in Britain.
Vehicles to be dropped are the Escort, Cougar, Villager and Lincoln Continental.
Ford said it was taking a $4.1 billion one–time charge to pay for its plan.
"For most of the last decade the Ford Motor Company was on a roll," Mr Ford said. "The great success we enjoyed may have caused us to underestimate the strength of our competitors."
The plan also includes the suspension of bonuses for company managers. Mr Ford said he would accept no salary.
For the company, the need to restructure so severely represents a complete change from its position just a year ago, when it reported a S6.67bn profit for 2000.
In the third quarter of 2001, Ford lost $692 million and when it releases its fourth quarter financial statement next week, it is expected to report its third straight losing quarter.
"We realize that some of the things that must be done will be painful," said Mr Ford, the great–grandson of founder Henry Ford. "I can't begin to describe how sorry I am about that."
The carmaker was hit hard by a self–inflicted financial wound in 2001 when it launched a $3bn programme to replace 13 million Firestone tyres that were not recalled in the original recall that began in August 2000.
The move resulted in the severing of Firestone's almost century–old relationship with Ford.
In July, much of Ford's top management was shaken–up, and Nick Scheele, the man known for turning around Ford's European operations, was named to take over North American operations.
The next month Ford announced it hoped to cut 4,000 to 5,000 salaried positions by offering early retirement and buyout packages.
By October, president and CEO Jacques Nasser was forced to resign and Mr Ford replaced him as CEO. Scheele was elevated to chief operating officer.
Both Mr Scheele and Mr Ford have said the future for Ford is based on getting back to basics, in product development and improvements in quality and productivity.
Ford officials also have blamed high marketing costs related to a fourth–quarter incentive war for its difficult financial position.Reuse content