Ford has met its job cuts target with 30 000 of 75 000 US factory workers accepting buyout and early retirement offers. It will cost dear, three billion instead of the one point three billion forecast, but it will help bring the struggling giant back into profit in three years time.
The departures begin in January. Both Ford and GM are scaling back and cutting factories as they lose market share to Asian rivals. Ford boss Alan Mulally said the slimming down had been “beyond his expectations” and would help Ford immensely. Ford needs help. America’s number two carmaker was a billion and a half euros in profit last year, but 2006 started badly, and got a whole lot worse in the third quarter. This year it has lost over five billion. Ford estimates over a billion euros will be saved every year, but the large number of employees taking payoffs has increased front-loaded costs.