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. Last Updated: 07/27/2016

Ford Cuts Jobs to Stem Its Market Slide

SOUTHFIELD, Michigan -- Ford's plan to close manufacturing plants and introduce new models may not be enough to halt a 10-year slide in business in the United States in 2006.

Ford, the world's third-largest automaker, on Monday said it would cut as many as 30,000 jobs and close seven assembly plants in North America by 2012 as it adjusts its manufacturing presence to reflect shrinking sales.

Ford also promised to offer bolder designs to win back customers. The North American unit has lost money in five of the past six quarters.

The Dearborn, Michigan, carmaker has seen its share of the U.S. market dwindle to 18.6 percent, down 7.1 percentage points since 1995. The company will likely lose almost another point in 2006, according to the average forecast of four analysts surveyed by Bloomberg.

Ford's executives have pledged this month to end the slide -- without giving a timeframe. Last year, each point of share represented about 170,000 sales in the United States.

Ford's "new product isn't enough, and it has to be compelling" to succeed, said Joe Langley, an analyst with CSM Worldwide, a consulting firm in Farmington Hills, Michigan.

Models such as the Ford Taurus are being phased out while the new Ford Edge and Lincoln MKX "crossover" wagons will not go on sale until the fourth quarter. General Motors and Toyota, the world's two biggest automakers, will release at least 17 new vehicles combined in 2006.

"We're not bereft of new product," executive vice president Mark Fields, the architect of the restructuring plan, said in an interview Monday. In 2006, the company will have a full year of sales for the Ford Fusion, Mercury Milan and Lincoln Zephyr sedans, which were introduced in October, he said.

It will introduce "freshened" versions of its Ford Expedition and Lincoln Navigator sport utility vehicles, Fields said. The vehicles "will help us in stemming the market-share loss," he said.

Analysts from consulting firms CSM Worldwide; Global Insight in Lexington, Massachusetts; and, the vehicle-pricing web site in Santa Monica, California, which also analyzes industry trends, project a 1 percent decline for Ford. IRN in Grand Rapids, Michigan, forecasts a drop of 0.5 percentage point to 0.8 percentage point.

Ford's U.S. market share has tumbled from a high of 25.7 percent in 1995 to 18.6 percent in 2005, according to Autodata of Woodcliff Lake, New Jersey. In the same period, Japanese-based Toyota has increased its U.S. share from 7.3 percent to 13.3 percent last year. Forecasts by Global Insight and CSM call for Toyota's U.S. share to reach at least 14 percent in 2006.

In 2005, Ford saw sales of profitable sport utility vehicles drop, including a 29 percent decline by the midsize Explorer SUV. Explorer sales in the United States hit a 15-year low in November after the introduction of a redesigned model. GM's TrailBlazer deposed Explorer as the top-selling SUV in the U.S. Sales of F-Series pickups also fell, by 4 percent to 901,463.

Initial sales of the Fusion have been stronger than anticipated, Ford says. "The Fusion will help them out, but it's only going to slow down the loss," said IRN auto analyst Erich Merkle.

The Fusion will be under pressure from the new Toyota Camry, as well as the similarly sized Nissan Altima and Hyundai's Sonata, Langley said.

Sales of Ford trucks are under pressure as competitor GM brings out its new line of full-size SUVs and pickups in 2006. "For Ford this year, it's kind of the game dodge ball, and they're it," Langley said. "Everyone is throwing products their way, and taking shots at them."