Ford plans 'recycled' car using soy beans

America's second biggest car manufacturer has revealed plans to invest millions of dollars in a recycled car it hopes will drive it into the 21st century.

Faced with tough foreign competition and a diminishing share of the market, Ford Motor Company has drawn up a secret plan called the Piquette Project involving both recyclable and bio-degradable materials, some based on soy beans.

"The old way of doing things doesn't work," said Bill Ford Jnr, great-grandson of the man who invented the Model T - the first assembly-line vehicle. "Is this risky? Of course it is. But going the way we were going is the highest risk of all."

The details of Ford's plan for a less environmentally damaging vehicle emerged as the company announced job cuts as part of a major restructuring plan to turn around a $16bn (£9bn) loss at the company's North American operation. Mr Ford announced cuts of between 25,000 and 30,000 jobs - around a fifth of its US workforce - and the closure of 14 plants by 2012.

Mr Ford, who has promoted himself as an environmentalist who is interested in Buddhist philosophy, said billions of dollars would be spent on environmentally friendly plants and products. He said that production of hybrid vehicles would increase to 250,000, about one-twelfth of its annual US sales, by 2010.

There is already an indication of the sort of vehicle the Piquette Project might develop. Last year the company unveiled the design of the Reflex, a concept car that featured solar panels to power its headlights and insulation made from old running shoes. The car, in theory, could obtain 65mpg. "Piquette helps to institutionalise innovation," Mr Ford said in the interview with Time magazine.

But environmentalists have voiced scepticism about turning Mr Ford's ambitions into reality. Eben Burnham-Snyder, a senior researcher with the Natural Resources Defence Council, said: "If they build these cars like they say they are going to then it's a major step for an American car company. The question is, is it going to pan out? Are they going to get these [hybrid] cars built? They have to retool their factories and retool their industry."

But Mr Burnham-Snyder added that, given the steady rise in petrol prices, US consumers were increasingly interested in hybrid vehicles, such as Toyota's Prius model.

Other campaigners claimed that Ford's business plan - focused on selling SUVs and trucks - was responsible for yesterday's job cuts. "Instead of pledging to reduce its workforce, Ford should have increased the fuel efficiency of its outdated fleet that sits unsold at dealerships across America," said Mike Hudema, a campaigner with the San Francisco-based group Global Exchange. "There is no way forward while the company is moving backwards on fuel efficiency and greenhouse gas emissions."

John Sellers, executive director of the Ruckus Society, a direct action and campaign group, said: "Ford will start hiring again when they beat their addiction to gas-guzzlers and build clean green cars."