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. Last Updated: 07/27/2016

Ford to Cut 35,000 Jobs To Halt Financial Woes

DETROIT -- Ford Motor Co. said Friday it would cut 10 percent of its workforce, or 35,000 jobs, slash production capacity and close up to seven North American plants as part of a plan to pull the automotive giant out of a stunning tailspin.

The long-awaited overhaul plan, for which the world's second-largest automaker said the company would take a charge of $5.7 billion, or $4.1 billion after taxes, against the fourth quarter of 2001, calls for the closure of vehicle assembly plants in three locations -- Ontario, Canada, in 2003, Edison, New Jersey, in 2004 and St. Louis, Missouri, later in the decade.

It also calls for the shutdown of two parts plants in Ohio and Michigan and major downsizings, including eliminating shifts, at 11 other plants. Two assembly plants -- in Cuautitlan, Mexico, and Avon Lake, Ohio -- could also close in the future, said chief operating officer Nick Scheele. This would bring to seven the number of plants Ford eventually shuts.

"It is a comprehensive plan, but it is not a magic wand," said chairman and chief executive William Clay Ford Jr. "It's going to be difficult, and in some cases painful, to turn this company around, but we will turn it around."

Ford's job cuts include 12,000 blue-collar positions in North America, in addition to 3,000 already eliminated from a total hourly work force of about 115,000 last year.

Ford and Scheele, along with chief financial officer Martin Inglis, spoke in a conference call for Wall Street analysts and journalists to lay out details of a plan that Ford said would restore it to a position in which it can reap $7 billion in annual pretax operating profits by the middle of the decade.

Highlighting its cash needs, Ford said it would raise $3 billion by selling a special class of bonds convertible to Ford common shares, in the third-largest U.S. convertible sale ever.

Ford shares closed up 21 cents at $15.50 on the New York Stock Exchange on Friday. The shares are well off their 52-week high of $31.42 and have underperformed the Standard & Poor's 500 Index by about 25 percent since the Sept. 11 attacks. The stock has also underperformed shares of General Motors Corp. by nearly 19 percent since the attacks.