Ford’s plan: Cut operating costs by $5 billion

“If younger guys like me with less than 10 years take the $100,000 and walk away without benefits or anything else, then we could be shooting ourselves in the foot,” he said. “A lot of the older guys can get a bonus for taking early retirement and keep their benefits and pension. If enough of them take it, that could leave jobs for the rest of us if we stay.”

Ford said that by the end of 2008 it would close or sell all facilities that it took back as part of a bailout of Visteon Corp., a supplier that was spun off from the automaker.

The company also expects to achieve full-year profitability in its North American automotive operations no earlier than 2009. It previously pledged to make money in North America in 2008, but said it could not accomplish that while continuing to invest $7 billion a year in new products.

It also plans to suspend the quarterly dividend on its common and Class B stock in the fourth quarter of this year. Earlier in the year it cut the quarterly dividend from 10 cents to five, saving $92 million per quarter.

Some Wall Street analysts said the plan did not go far enough.

Merrill Lynch analyst John Murphy downgraded the company’s stock from neutral to sell and said the plan focuses on buyouts and doesn’t address other issues.

“It does not materially accelerate product introductions. It does not provide a solution for the troubled facilities assumed from Visteon. It does not cut capacity deeper. It’s missing a lot,” he said.

Ford said that by the end of 2008 it would close or sell 18 plants and other facilities that it took back as part of a bailout of Visteon Corp., a supplier that was spun off from the automaker.

Morgan Stanley maintained its equal-weight rating on the automaker.

“While we are pleased to see greater cost reduction and more acknowledgment of the reality/gravity of the situation, we remain concerned that current results are worse than we think,” analyst Jonathan Steinmetz said in a note to investors.

Ford shares fell $1.07, or 11.8 percent, to close at $8.02 on the New York Stock Exchange Friday. Its shares have traded in a 52-week range of $6.06 to $10.09.

The company lost $1.4 billion during the first half of this year.

In its announcement, Ford conceded that it is ready to accept a smaller slice of the market, focusing on profitable sales instead of volume. It said that with new products and quality improvements, it expects market share of 14 to 15 percent going forward.

The country’s second-largest automaker has seen its market share decline steadily in recent years from about 26 percent in the early 1990s.

“The most important thing we do is to size our company and our capacity to the current demand and, on top of that, to continue to invest in the products and services — the cars and trucks — that the customers really, really want,” Chief Executive Alan Mulally said. Mulally, who was named to the post last week, led a turnaround at the commercial jetmaking division of Boeing Co.

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