Ford has other options if buyouts come up short: CEO

By David Bailey

DETROIT (Reuters) - Ford Motor Co (F.N) has other options to cut costs if a just-completed round of buyouts for its U.S. blue-collar work force comes up short of its targets, the automaker's chief executive said on Wednesday.

"We have a lot of other options to keep right-sizing the place," Ford Chief Executive Alan Mulally said in a presentation to analysts in New York that was monitored by Webcast.

Mulally said he would not elaborate on what the other options were.

Ford's more than 50,000 U.S. factory workers represented by the United Auto Workers union had until midnight on Tuesday to decide whether to take one of a range of buyout offers that included one-time payouts of up to $140,000.

The automaker has not set a public target for how many workers it plans to cut, but UAW workers have said they expect only several thousand to accept the buyouts, far fewer than took offers in 2006.

Mark Fields, Ford's president of the Americas, told reporters on the sidelines of the New York auto show that the automaker did not yet know the results of the buyout offer, but would announce them in a few days.

Ford, which lost $2.7 billion in 2007 and $12.6 billion in 2006, has been cutting production and its dealer network in the United States to match capacity with a falling market share.

Mulally, speaking later on CNBC, said he was uncertain whether the U.S. economy had reached a bottom and still expected U.S. industrywide vehicle sales to recover in the second half of 2008, but that depended on the housing market.

During his presentation at the Morgan Stanley Automotive Conference, Mulally said Ford would continue to reduce production as needed to respond if demand falls further.

Ford's restructuring, which includes a focus on matching demand for smaller vehicles as well as capacity cuts, remains on plan or ahead of plan, Mulally said. The plan also has been "stress-tested" to continue to work even in the current soft sales environment.

Ford has forecast U.S. industrywide vehicle sales of 15.7 million units for 2008 and the first two months have run closer to a 15.3 million rate, which is near the low end of its expected range for the first half of the year.

"No matter what happens, we will just keep monitoring the situation and adjusting the production for demand," he said.

Influential industry tracking service J.D. Power and Associates cut its 2008 forecast for U.S. sales of cars and light trucks by 5 percent on Tuesday to 14.95 million, which would be the lowest total since 1994.

Fields told reporters the industry had to be careful to not get into a "lambada contest" of continually lowering sales expectations.

"We could have different results in the second half (of 2008)," Fields said, noting the government's stimulus package which will deliver paychecks to U.S. consumers' mailboxes in the spring and could boost sales of big ticket items.