Ford last night lowered its profit forecasts for the full year, further darkening the increasingly bleak outlook for the American car manufacturing industry.
The company, the second largest carmaker after General Motors, also announced further management job losses in North America and other cost-cutting measures including the elimination of bonuses this year.
In a statement, Ford said the profit estimates for its core North American division had worsened "due to a weaker outlook for vehicle sales". Earnings guidance is being cut sharply, from a range of $1.25 to $1.50 a share to between $1 and $1.25.
The warning represents a rapid deterioration in Ford's fortunes. It had lowered its full-year profit forecast as recently as April, cutting its estimate then from up to $1.95 a share. The latest warning was issued after the stock market had closed.
Ford is planning to cut another 5% of its management, or "salaried", positions in North America. It also said it would stop matching pension contributions by salaried employees and reduce spending on outside agencies and purchased services by 10%.
The cuts, directed chiefly at the management level, might be a tactic to mollify unions as the big Detroit carmakers struggle to reduce spending on healthcare and negotiate to lower the number of factory workers. The reduction in management positions is in addition to 1,000 salaried job losses announced by Ford in April. Over the past few years Ford has cut tens of thousands of jobs.
The company said it is also evaluating options for reducing personnel-related costs outside North America.
"Challenges continue to mount, especially in our North American automotive operations," said Don Leclair, Ford's chief financial officer. "We're taking steps immediately to reduce further our salary-related costs this year; these are a continuation of a series of actions we plan to take."
Ford, like GM, is facing a long list of problems. Both are losing market share under the weight of intensifying competition from overseas manufacturers; they also face a worsening product mix as American consumers turn away from gas guzzling sports utility vehicles, rising raw material costs and the soaring cost of providing healthcare for their workers in the US.
Ford's domestic sales have fallen 5.2% so far this year. The company reported a 38% slide in first quarter profits in April to $1.2bn (£660m). At the time it admitted it would miss the target it had set of $7bn in annual profits by 2006.
The announcement was a bitter disappointment to Bill Ford Jr, who restored the family dynasty when he took over as chief executive as the firm was teetering on failure. He vowed to return the company to its glory days in a five-year turnaround plan. Last month he said he intended to forgo all compensation until the company is sustaining profitability.
Ford is planning a flotation of its Hertz rental business as one way of bolstering its own balance sheet. In the filing, Ford said it intended to sell its remaining share in Hertz after the float, providing itself with some financial flexibility.
Wall Street views the move in part as a response to Ford's debt being downgraded to junk status by the credit rating agency Standard & Poor's earlier this year, a change that could make it more difficult to raise further cash.
GM fell to a $1.1bn loss in the first three months of the year, its worst in more than a decade.
