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Ford extends cost cutting
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December 3, 2001: 3:34 p.m. ET
Carmaker to halt matching 401(k) contributions, boost health-care premiums.
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NEW YORK (CNN/Money) - Ford Motor Co. said Monday it will make several changes to employee benefits, including the suspension of matching contributions to the company's 401(k) plan, in an effort to cut costs.
Ford (F: down $1.14 to $17.80, Research, Estimates) officials said they also will eliminate the second shift at the Edison, N.J., assembly plant in February as part of an ongoing restructuring, and could lay off up to 600 hourly workers and 30 salaried employees.
The move at the plant, which builds the Ford Ranger compact pickup truck, will reduce annual production by 84,000 units.
"These plant and benefit actions, while painful for our employees, are necessary as we confront a serious situation," Chairman and CEO Bill Ford said. "More tough decisions will follow in the months to come."
Company officials estimated these changes will save the company about $300 million annually, after taxes.
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The 401(k) matching program will be suspended for an undetermined period beginning Jan. 1.
In addition, the company will eliminate merit increases for about 2,200 top-level managers, and employees' health-care premiums and prescription drug co-pay will be increased in 2002. 
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