Ford and GM Hurting

After a disappointing performance in the first half of the year, Ford Motor Company is considering cutting more salaried workers, a company spokesman said Friday. Ford spokesman Oscar Suris wouldn't confirm a report in The Wall Street Journal that said Ford may lay off up to 30% of its white-collar work force - about 10,500 of its 35,000 salaried workers - in North America over the next few years. But he noted that earlier this week, Ford CFO Don Leclair said "nothing is off the table" when asked about possible cuts during a conference call to discuss second-quarter earnings.

Ford already has announced plans to reduce its salaried work force in North America by 2,700 people by the end of this year. It also has said it will reduce the use of agency workers and other purchased services by 10%. But Suris said the company is considering even more aggressive measures. "We have operating challenges that include our cost structure and excessive production capacity, and we have plans to address that," Suris said.

Ford said it earned $946 million in the April-June period versus a profit of $1.17 billion in the year-earlier period. It lost $907 million in North America, down $1.4 billion from a year ago. Ford's U.S. sales were down nearly 4% in the first six months of this year.

So Ford made $1.853 billion on sales outside the US? Man, if they could somehow wipe their US operations off the face of the Earth, they would be on easy street!

Ford CFO Don Leclair said the automaker would no longer issue quarterly earnings forecasts. GM withdrew its earnings outlook for 2005 after reporting a stunning $1.1 billion first-quarter loss in April. Both GM and Ford have been hurt by a dramatic slowdown in sales of profitable mid- and large-size sport utility vehicles amid high gasoline prices. They are also struggling with higher borrowing costs following cuts in their debt ratings to "junk" status by the Standard & Poor's rating agency in May.