Ford to cut another $1 billion

Oct. 22, 2002 at 12:36 PM
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DETROIT, Oct. 22 (UPI) -- Ford Motor Co. stock Tuesday opened at its highest level in nearly a month following announcement of plans to cut another $1 billion in costs.

Chairman and Chief Executive Officer William Clay Ford Jr. told investment experts in Boston Monday the cuts will not include job cuts or affect the quality of Ford products.

"I need more," Ford said he told his staff.

The $1 billion is in addition to $2 billion in cuts promised for this year from what Ford described as "general overhead." The $2 billion already has been cut from traditional overhead, plant actions and material costs.

"We're now three-quarters into this and we're at or ahead of all of our targets," Ford said.

Wall Street responded favorably to Ford's plan, pushing stocks up $1.29 Monday to $9.55, its highest level since Oct. 1 and biggest percentage game since 1991. Eighteen months ago, Ford shares were trading at $30. At midday Tuesday, the stock was up another 18 cents at $9.73.

Last week, Ford reported a net third-quarter loss of $326 million but excluding one-time charges actually posted a day-to-day operations gain of $220 million, ahead of analysts' expectations. Documents filed with the Securities and Exchange Commission Monday indicate Ford will report a 40-cent-a-share operating profit for 2002.

In other news:

-- Ford is debuting a global advertising campaign tied to MGM's "Die Another Day," the latest James Bond film. Bond, played by Pierce Brosnan, is back in an Aston Martin for the flick while the Halle Berry character, Jinx, drives a Limited Edition 007 Ford Thunderbird.

-- DaimlerChrysler President and CEO Dieter Zetsche Tuesday praised the new agreement with the Canadian Auto Workers, saying it will lead to new jobs, new investment and a new "benchmark" manufacturing facility for North America. The project, once finalized, could produce 1,000 jobs, offsetting the loss of 1,100 jobs when the company's Pillette road plant in Windsor, Ontario, stops producing the Dodge Ram next summer.

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