Ford Motor Co. plans to cut costs by $1.5 billion by the end of the year mostly through early retirements and layoffs in the automaker's white-collar work force, Chairman Harold Poling said Thursday.
Poling, speaking to employees in a closed-circuit television broadcast, didn't mention a target number for shrinking its force of 52,000 white-collar workers.``While we're hopeful that employees opting to leave under this program will reduce the need for other reductions, it's becoming increasingly clear that some salaried layoffs are inevitable in the short term,' Poling said.
There have been reports that Ford wants to cut the salaried work force by as much as 20 percent. The early retirement program will be open during March, and retirements must take effect by May 1.
The cuts, Poling said, are part of a $3 billion program to trim expenses worldwide. Ford's capital spending program, which reached $7.3 billion last year, will not be affected.
Each of the Big Three has been involved in aggressive programs to cut payrolls.
General Motors Corp. has said a program begun in 1987 has resulted in cutting $13 billion out of its annual costs of about $114.2 billion last year. On Feb. 4, GM Chairman Robert Stempel said the automaker would cut about 15 percent of its 100,000 or so white-collar jobs in the next two years.
Chrysler Corp. has declined to say how many of its white collar jobs are at stake in a $3 billion program to lower its $30.5 billion in annual costs. However, there are estimates that about 3,000 of the company's estimated 24,000 white-collar jobs will be cut.
Earlier this month, Ford reported a $519 million loss for the fourth quarter of last year, and Poling said the automaker expects a significant loss during the current quarter. In the first quarter of last year, Ford earned $506.2 million.
For all of 1990, Ford earned $860 million, down 77.6 percent from 1989. At that earnings level, there will be no profit-sharing checks for Ford's 100,000 hourly workers and no bonuses for its salaried employees.
In addition, Poling said Thursday, merit increases for top management will be suspended through the first quarter of next year, merit increases for other managers will be cut by 25 percent during the same time, and company matching contributions to executives savings and stock-investment plans will be suspended.
``We've focused on reducing the ongoing costs of the company and have limited to the extent possible the direct impact on employees,' Poling said. ``Unfortunately, the next step will impact all of us.'