Ford Motor Co. is poised to close plants and cut jobs in North America, but analysts wonder if it will be enough to turn around the loss-making division.
"Whether longer term that actually makes a difference, I have questions about that," said Argus Research group analyst Kevin Tynan.
Ford needs wage and benefits cuts from the United Auto Workers union to compete with Asian rivals, he said.
"If you line up Ford with Toyota, let's say, even if you put them at the same capacity in the US, it's still costing Ford more to build here because of the compensation package," Mr Tynan said.
Ford has said it would unveil in January a restructuring for North America, dubbed "Way Forward", which Chief Executive Bill Ford Jr has said would include plant closings.
Ford is likely to close at least five assembly plants in North America to bring capacity in line with demand, said Steven Szakaly, economist at the Centre for Automotive Research in Ann Arbor, Michigan.
Like General Motors Corp., Ford has seen its margins squeezed by soaring health-care and raw material costs, and a decline in US market share. So far this year, Ford's North American unit has lost over £810 million before taxes.
GM said last week that it would cut 30,000 jobs through 2008 and close 12 facilities to reduce excess capacity.
Ford's plants in St Louis, Atlanta, St Paul in Minnesota, Wixom in Michigan and Cuatitlan in Mexico, are among the most vulnerable, analysts said. They employ around 7,900 people, roughly 6.5 per cent of Ford's North American work force.
Ford spokesman Tom Hoyt declined to address the subject of plants that might be closed, saying plans had not been finalised.
Last month, Ford said it planned to eliminate 4,000 salaried jobs, or 10 per cent of its North American white-collar workforce, as part of the plan.
The company launched a multi-year restructuring programme in 2002 that included 35,000 job cuts, seven North American plant closings and elimination of unprofitable models.
Ford's North American head Mark Fields is expected to present Bill Ford with the plan later this month.
The company's Atlanta plant makes the Taurus sedan, slated to be phased out in early 2006. No new products have been announced for that plant.
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