msnbc.com news services
updated 9/11/2006 10:52:13 AM ET 2006-09-11T14:52:13

Struggling automaker Ford is preparing a deeper round of salaried job cuts that could be announced as early as Friday according to a report in Monday’s Detroit News.

Separately, the company’s North American sales chief, Cisco Codina, said Monday the automaker is planning to shrink its U.S. dealer network in the next three years to align distribution better with its current market share.

According to the Detroit News newspaper, Ford will begin to offer voluntary buyout packages and early-retirement incentives to white-collar workers. Involuntary layoffs are likely to follow if too few workers take advantage of the incentives, the paper said.

The cuts are part of a broader cost-cutting strategy that is expected to include an expanded buyout program for blue-collar workers and accelerated plant closings. This round of job cuts will be deeper than the 4,000 white collar jobs eliminated in the first quarter of the year, according to the report. Ford has between 35,000 and 40,000 salaried employees in the United States.

Ford’s Codina told the Reuters Auto Summit Monday that the company has told its dealers that it plans to make “a concentrated effort” to align sales to the number of dealers in the marketplace. Codina also said most of Ford’s dealers are concentrated in metropolitan areas on the East Coast and in California, which he termed as “problem areas.”

“I would probably say the East Coast is of particular importance to us and a concern,” he said. “But equally we have markets in California and in other large cities that we would have to address.”

Codina, however, declined to give a target for the desired number of dealers. Ford currently has 4,600 dealers across the United States, with 1,500 in major metropolitan areas.

News of the shrinking dealer network and further job cuts come with Ford under growing pressure from analysts and investors after losing $1.44 billion on the first half of 2006. Sales so far this year are off 10 percent from year-ago levels.

Recently, Ford named Boeing executive Alan Mulally to be its new chief executive officer, as Bill Ford ceded operational control after a troubled five-year stint at the helm. He will remain actively involved as the company’s “executive chairman,” he said.

Ford also recently said it may sell off the prestigious British sports car maker Aston Martin. Other reports have Ford considering going private or possibly angling for a role in the Renault-Nissan alliance led by industry guru Carlos Ghosn.

And to deal with mounting losses and a dwindling market share, Ford is cutting its U.S. production by 21 percent this year and is expected to announce more changes soon that would go beyond those detailed in its “Way Forward” recovery plan, delivered in January. Those plans called for the closure of 14 plants and 30,000 job cuts by 2012.

Reuters contributed to this report.

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