This is Steve Emberwith the VOA Special English program, IN THE NEWS.
Last week, the second-largest American automobile manufacturer,Ford Motor Company, announced plans to re-organize. It said it wouldclose five factories and cut thirty-five thousand jobs worldwide.Ford also said it would stop making four of its car models. Fordexpects to be manufacturing about one-million fewer cars by the yearTwo-Thousand-Five than it does now.
Most of the job cuts will affectworkers in North America. Four of the factories that will close arein the United States. The other is in Ontario, Canada. Ford will endabout twenty-two-thousand jobs in North America. The rest of thecuts will happen in Europe.
The company's chief executiveofficer, William Ford, announced the cuts. He said the company issorry that some of its plans will cause pain. But, Mister Ford saidhe believes the reductions are necessary for the company to compete.
Mister Ford also said he would not accept any pay from thecompany, except in stocks. He said, this way, he will only earnmoney if the re-organization succeeds.
On Thursday, Ford announced it had lost almost five-and-one-halfthousand-million dollars last year. The loss includes more thanfour-thousand-million dollars Ford will spend to re-organize. Thelast time the company had a yearly loss was in Nineteen-Ninety-Two.
In Two-Thousand, Ford recorded a profit of more thansix-and-one-half-thousand-million dollars. Mister Ford says thatgreat success may have led the company to underestimate the growingstrength of competitors. He said Ford also under-estimated theeffect of the slowing of the economy.
Financial experts say all three large American car companies werehurt by the terrorist attacks in the United States. Sales of newcars dropped after September eleventh. Car companies began to makelimited special offers to get shoppers interested in buying newcars. These offers included interest-free loans to buy cars.
The offers did increase car sales. Yet, experts say the increasemay have been too great. They say that some people who planned tobuy new cars in Two-Thousand-Two bought them early in order to getthe special offer. That means car companies lost the business ofpeople who would have paid a higher price.
American car companies were also hurt by foreign competition.Sales of Japanese and Korean made cars are increasing in the UnitedStates.
Ford had other increased costs last year after the media beganreporting serious crashes of Ford Explorers. The crashes appeared tobe caused by the sudden failure of tires made by theBridgestone/Firestone company. Ford had to replace the tires.
Experts say this year will be difficult for the Ford Motorcompany. But company officials hope the re-organization plan willlead to increased profits in the future.
This VOA Special English program IN THE NEWS was written by CatyWeaver. This is Steve Ember.