NEW YORK, Jan 28 (Reuters) - Ford Motor Co.’s (F.N) finance unit plans to cut a fifth of its workforce, or about 1,200 people, to save money, reports said on Tuesday.
More details of the cutbacks, which were reported by Automotive News and Bloomberg News, are expected on Thursday when the automaker and its finance unit release fourth-quarter and full-year results, Automotive News reported.
The first pink slips will go out in mid-February, according to the Automotive News, which said the cuts would include involuntary layoffs, some planned attrition and retirements.
“This will help keep our costs in line with the level of receivables we have,” both reports quoted Ford spokeswoman Margaret Mellott as saying.
Ford was not immediately available for comment in response to the reports.
Ford is expected to post a hefty fourth-quarter loss, but the key question for investors and creditors is whether it will turn to the government for support. Ford has previously said it does not need state-backed loans. [ID:nN28528351]
The U.S. auto market, the world’s largest, fell to 26-year lows in December and is expected to have fallen further at the start of this year, ratcheting up the pressure on an already reeling industry.
Ford has sought a $9 billion line of credit to use as insurance against a worsening in the global economy.
Analysts on average expect Ford to post a fourth-quarter 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.
In November, Ford said it planned to improve automotive cash by $14 billion to $17 billion through 2010 through a number of cost cuts, including reducing expenses for salaried workers by 10 percent by the end of January in North America. (Reporting by Christopher Kaufman; Editing by Anshuman Daga)