Ford hopes to reduce operating costs by $5 billion (£2.7bn). It will cut salaried-related work force by a third, the equivalent of 14,000 jobs, reduce production capacity and 70% of Ford, Lincoln and Mercury models will be upgraded between now and the end of 2008.
Despite its problems in the US, Ford still expects its European operations to be profitable in 2006. However, full-year operating losses are expected for its Premier Automotive Group.
'These actions have painful consequences for communities and many of our loyal employees,' said Bill Ford.
'But rapid shifts in consumer demand that affect our product mix and continued high prices for commodities mean we must continue working quickly and decisively to fix our business. Mark Fields and his team deserve credit for the accelerated Way Forward strategy, which puts us on an even faster product-driven path to success.'