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Ford plans restructuring
CEO says No. 2 auto maker to reveal details in fall; firm hopes to boost North American operations.
August 24, 2005: 2:54 PM EDT
Ford will announce a restructuring plan this fall to return its Noth American auto unit to profitability.
Ford will announce a restructuring plan this fall to return its Noth American auto unit to profitability.
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Ford will announce a restructuring plan this fall. CNN's Ali Velshi reports. (August 24)
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DETROIT (Reuters) - Ford Motor Co. will soon announce a new restructuring plan to return its key North American vehicle operations to profitability, Chairman and CEO Bill Ford Jr. said Tuesday.

"I would say before fall gets too old," the family scion told reporters when asked about the timing of the announcement.

The nation's No. 2 auto manufacturer has said it is working on more restructuring actions to halt steep losses in its North American business.

Strong competition, soaring health-care and raw material costs, and a slide in U.S. market share forced the auto manufacturer to slash its profit forecast twice this year. Ford's North American auto operations swung to a pretax loss of $1.21 billion, including charges, in the second quarter.

"It will encompass a lot of things, an affordable business structure ... some new things we are going to announce that will surprise people positively," Bill Ford said, referring to the restructuring plan.

"It will be really, in my mind, a rather comprehensive announcement," he added. He declined to be more specific.

The company's Volvo Cars division plans to lay off up to 1,500 workers, or 5 percent of its global work force this year, part of an effort to cut costs by more than $130 million, a company spokesman told Reuters on Tuesday.

Ford was speaking to reporters after an address to business leaders where he paid tribute to departing Chrysler Group CEO Deiter Zetsche, who is heading back to Germany to lead DaimlerChrysler. He said the company has not decided on a date for the announcement, but he indicated it would not be before October.

The auto manufacturer has not ruled out deeper job cuts in Ford's salaried work force or the closing of manufacturing plants. Ford, which has said its global automotive business will post a loss this year, announced earlier that it will cut its North American white-collar work force 8 percent in 2005.

Bill Ford has been holding off-site meetings with a small group of top executives in the last two months to hash out additional cost-cutting moves, a source familiar with the situation told Reuters.

"What we are facing, although very difficult, is something that we absolutely can and will emerge from," Ford said.

He also said the car maker is looking at ways to increase production of hybrid vehicles and expand its offerings.

"I would like to get more hybrids out of our system because I do think it's something that is here to stay," he said.

Ford, which entered the hybrid market last fall with the introduction of the hybrid version of its Escape sport utility vehicle, has already advanced its plans to launch more hybrids in the United States due to the rising popularity of the gas-sipping vehicles.

"I am looking at finding a way to expand that further," Ford said.

Ford also told reporters that he tried to hire away Zetsche from DaimlerChrysler several years ago, but that talks didn't lead anywhere.

"He is obviously incredibly talented," Ford said.

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Ford Motor Company
Restructuring and Recapitalizations
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