DETROIT -- Ford Motor Credit will cut 20 percent of its U.S. work force as auto sales plunge and the company provides financing for fewer brands.
About 1,200 jobs will be eliminated by the end of July, Ford Credit spokeswoman Margaret Mellott told Automotive New this evening.The move follows a 21.8 percent decline in Ford Motor Co.'s U.S. sales last year, spurred in part by the sale of the Jaguar and Land Rover brands to India's Tata Motors.
"This will help keep our costs in line with the level of receivables we have," Mellott said.
More details will be shared Thursday when the automaker and its finance unit release fourth-quarter and full-year earnings reports.
The Ford Credit job cuts will begin in mid-February, Mellott said. The 1,200-position reduction will be achieved primarily through involuntary layoffs and include some planned attrition and retirement. Ford Credit's headquarters in suburban Detroit, regional business centers and field staff will be affected.
In addition to dropping Jaguar and Land Rover, Ford Credit is moving away from writing loans for Mazda. Ford reduced its stake in the Japanese automaker in November to raise cash.
Business centers
All nine of the finance unit's U.S. business centers will remain open, Mellott said. The credit unit consolidated much of its branch office network into those centers in 2006.
Field operations will be consolidated from seven regions to five, and the number of sales territories will shrink from 64 to 22. The moves will align the field units with those of the Ford Customer Service Division, Mellott said.
Field-position employees, many of whom operated out of home offices, will go from 590 to 340.
Ford Credit currently employs 6,100 in the United States. No cuts are planned for the unit's Canadian operations, Mellott said.
Ford Credit told employees about the job eliminations on Wednesday.
The credit unit cuts come in addition to the automaker's previously announced 10 percent reduction in North American salaried costs. Those cuts, expected to be the equivalent of roughly 2,300 positions, are scheduled to be completed by Friday.
Analysts on average expect Ford Motor Co. to post a quarterly loss of $1.22 per share before one-time items, according to Reuters Estimates. That would translate to a loss of more than $2.8 billion.
Courtesy of AutoNews.com
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