Ford Cuts Yearly Outlook, Plans New Cuts

[Trojan]

Ford Cuts Yearly Outlook, Plans New Cuts

DEARBORN, Mich. (AP) - Ford Motor Co. on Tuesday lowered its earnings outlook for the full year, citing continued weakness at its North American operations, and announced plans to reduce its management ranks by an additional 5 percent.

The nation's second-largest automaker said it now expects to earn $1 to $1.25 per share, 25 cents lower than its previous forecast issued in April. The company said the profit outlook for its North American operations has weakened over the last two months, and added that ``continued supplier-related challenges'' will also affect results.

Ford raised its second-quarter earnings guidance before special items to a range of 30 cents to 35 cents a share, up from previous estimates of break-even to a loss of 15 cents a share.

Analysts appear to have viewed Ford's earlier full-year forecast for earnings of $1.25 to $1.50 per share as too optimistic, based on the average estimate of $1.16 per share carried in a survey by Thomson Financial. The average estimate for the second-quarter is 13 cents a share.

``Although we have increased our earnings guidance for the second quarter, challenges continue to mount, especially in our North America automotive operations,'' Chief Financial Officer Don Leclair said in a statement.

Ford also said it was taking new steps to reduce costs related to salaried employees this year. The company will cut salaried positions at its North American operations by 5 percent and reduce the use of agency and purchased services by 10 percent. The new cuts come atop 1,000 salaried job cuts announced in April.

Ford shares rose 6 cents to close at $11.17 Tuesday on the New York Stock Exchange, then fell 41 cents, or 3.7 percent, in extended trading. Dearborn-based Ford cut its outlook after the markets closed.

Ford also will eliminate the 2005 bonuses for salaried management employees, and suspend the matching grant in its 401(k) for salaried employees effective July 1.

Ford earned $1.2 billion in the first quarter, but the company has said it's bracing for tougher times ahead because of lower vehicle production, rising health care expenses, decreased demand for some of its profitable trucks and SUVs and other factors.

Last month, Standard & Poor's Ratings Services downgraded Ford's debt, along with No. 1 General Motors Corp., to below investment grade, or junk status. S&P said the automakers no longer can count on generating enormous profits from their SUV lineups, which could cause a severe blow to profits.

Earlier this month, Ford said its Hertz Corp. car rental unit filed with the U.S. Securities and Exchange Commission for an initial public offering. Following the IPO, Ford said it plans to divest its remaining ownership in Hertz. In April, Leclair said Ford was considering selling Hertz, which it's owned since 1994, in an effort to focus on its core automotive business.

On the Net:

www.ford.com
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I did what I could do for them this month/year and bought me one. I'm all about supporting American Business escpecially Ford. The creator of the Model-T. Horses became pets.

[-live-wire-]

They will be building them in Pakistan if we dont do something..I say..keep the jobs here..no matter the cost..(what does an unemployed family cost)...we soon may know...I have always liked them both, Ford and Chevy..but I bought a Dodge and a Pontiac.. what's wrong with me..(comming in a later issue)
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Nice car Troj!

[Trojan]

I really want these types of jobs to stay stateside to. We've got a lot to lose before it's all over with. We are weakoning and they see it as strengthening Global Economy and saving money. We do have much to be concerned about. Me's a slut to. I've had Ford, American Motors, Chevy and Jeep.

[Lakie]

Its not just asia you have to worry about, australia is exporting more andmore cars to the US, particularly under the GM and pontiac name.

For example, the legendary Pontiac GTO last year was designed and built here in Australia, infact its just a variation on the Holden Monaro.

[-live-wire-]

Mikes a smart guy..what do you drive ?

[Lakie]

i dont for 2 reasons

1. I havent found a car i can really drive safely, so havent bothered getting my license (im 6' 10 " and 300 pounds..)

2. Im much more financially better off than almost everyone i know my age who has a car, cars just leach money, so ill wait till i can truely afford it, and i want to buy a new car when i do, not a bomb i cant rely on...

[atholon]

Get a Bullet Bike

I am really mad at all this outsourcing. Stupid companies.

[Lakie]

its not the companies, its the consumers, if consumers were willing to pay twice as much if cars were mead in the US then they would be, its the consumers that want everything cheap that need to be blamed here.

[BADDOG]

This is sadly the price we all pay for being part of a global market. As Mike says consumers want cheaper prices so companies outsource to countrys where their overheads are low and profits are high.

What can be done about it to save jobs remains to be seen as protectionism will not work and goes against the whole idea of having a free global market.

Regards

[SilentTrigger]

Good thing that i'm part of the truck section of volvo that is not owned by ford

Anyways, Ford want volvo to make less safe cars, do you think that will ever happen? As Volvos motto is safe cars hehe