THE crisis in the automotive sector deepened yesterday with Ford confirming plans to shed a further 450 workers and flagging more production cuts through to the end of the year that will hit component makers and lead to additional job losses.

Hurt by the growing number of drivers ditching large cars such as the Falcon in favour of smaller vehicles, and a slowdown in car sales, Ford has added five days of production shutdowns through to the end of the year, and warned it could double that to 10 days. This is on top of the 13 days of shutdowns announced in August.

Holden is also planning more down days between now and the new year.

The cuts will hit component suppliers already reeling from production cutbacks in the industry. Ford signaled in August it would be cutting production from 360 vehicles a day to between 280 and 290.

"We fear there will be in excess of 1000 job losses in the components sector as a result of the Ford cutbacks," Australian Manufacturing Workers Union Victorian secretary Steve Dargavel told The Australian.

Component makers have already warned that 7000 jobs in the sector could go before the end of next year.

Ford is confident it can achieve the targeted cuts with voluntary redundancies, but uncertain Ford workers are set to cut back on their spending while workers at component makers will be nervous at the prospect of stand-downs or job-shedding.

"You don't go out as much, you spend less on food and you save up to have your car serviced," Ford plant worker Andrew Reardon, 32, told The Australian.

Mr Reardon, who is paying off his house in Broadmeadows, near the assembly plant in Melbourne's north, and looks after his 73-year-old mother, said he would not be volunteering.

He is worried that if forced out he'll be left hunting for a less well-paid job. "A lot of us are freaking out," said Mr Reardon, who defied a company ban on talking to the media.

The AMWU says Ford workers could be reduced to working only two or three days a week until the new year. Unless they made up for that time with holidays, workers would only get half-pay on shutdown days.

The uncertainty for workers is being exacerbated by Ford considering outsourcing 740 more jobs, the union says.

The job cuts bring to 1400 the total lay-offs announced by Ford in the past 15 months. In August, the company announced 350 cuts in manufacturing, and 600 jobs will go when it shuts the Geelong engine plant in 2010.

Victorian Premier John Brumby said he was disappointed by the job losses and called on employers to hold their nerve. "To all businesses and employers: I know times are tough, I know there is a lot of pressure on shareholders and companies, but companies have to make that extra effort at this point in time to hold people, to keep them," Mr Brumby said.

The latest cuts at Ford cover the whole business, including plant workers and office staff, and will be split roughly evenly between the Geelong and Broadmeadows plants.

"We're taking the right action to right-size our business," new Ford Australia boss Marin Burela told reporters at Broadmeadows yesterday.

"Clearly the economic conditions around the world and certainly some of the things we are facing in Australia have had a severe impact on us."

The latest generation FG Falcon was launched in May with the declared aim of dethroning Holden's Commodore. But it has failed to make a dent.

Ford creates History with record losses

F250 F150 sales part of the blame?

By Tom Krisher Associated press

DETROIT -- Ford Motor Co. could post the worst annual loss in its storied 103-year history when it releases its 2006 earnings today.

The old record net loss was US$7.39 billion in 1992, but through three quarters of last year, Ford already had lost $7 billion. Analysts polled by Thomson Financial expect more red ink in the fourth quarter, predicting an average quarterly loss of $1.01 a share and $1.35 a share for the year, excluding special items.

"The fourth quarter's going to look real ugly," said Erich Merkle, director of forecasting for the auto consulting company IRN Inc. in Grand Merkle predicted Ford would get as much bad news out of the way as it can for the end of 2006, beating the 1992 record.

"Let's just air all our dirty laundry all at once. Take the medicine and then we can move on. I definitely think that's their philosophy, knowing it's going to be real poor," Merkle said.

Burnham Securities analyst David Healy said in a note to investors that Ford has yet to recover from its finances being wrecked by collapsing sales of its F-series pickup trucks and truck-based sport utility vehicles.

The company made a profit of $1.44 billion in 2005, and in the fourth quarter of that year it produced and shipped 355,000 of the high-profit large and mid-sized truck models, Healy said. That dropped to 213,000 in the final quarter of last year, he said.

"In our view, most of the year-to-year increase in losses lies in the 142,000 year-to-year decline in these high-profit models," Healy said.

Production of other Ford models dropped by 53,000 in the fourth quarter of last year compared to the last quarter of 2005, driven by dealer stock reductions and the company's strategy to reduce traditional low-profit sales to rental car companies, Healy said.

Efraim Levy, senior industry analyst for Standard & Poor's, predicted Ford would post a $2-billion net loss for the last quarter of 2006.

Like other analysts, he sees bottom-line improvement in 2007 even though he predicts revenues will drop by seven per cent compared to 2006. He still sees a loss for this year, but said the improvement will come as Ford becomes more efficient and cuts costs by slicing its workforces.

About 38,000 hourly workers have signed up for buyout or early retirement offers from the company, and Ford plans to cut its white-collar workforce by 14,000 with buyouts and early retirements.

The company has mortgaged its assets to borrow up to $23.4 billion to fund a massive restructuring plan and cover billions in losses expected until 2009. It expects to burn up $17 billion in cash during the next two years before returning to profitability.

Ford has rolled out or will introduce several new or updated products in 2007, including the Edge crossover, new F-series Super Duty pickups, a redesigned Focus small car and an updated Five Hundred larger sedan. But Levy said the company's new vehicles won't be strong enough for it to recover much this year.

Auto sector reels as Ford cuts 450 jobs on top of Holden job losses

Ford creates History with record losses

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