Last year Ford sold 3.8 million vehicles in North America. The company, which can produce 5.7 million automobiles, used only 67 percent of its potential manufacturing capacity.

Ford, which plans to announce its fourth-quarter 2001 earnings on January 17, is expected to post its first full-year loss since 1992. The New York Times reported the auto producer will mark a $900 million fourth-quarter loss -- about five times greater than expected.

In spite of near-record auto sales last year for both Ford and General Motors, steep discounting affected both auto giants' bottom line. The manufacturers offered rebates, zero-interest loans, and cheap leases to bring in customers and maintain high sales, even as the economic downturn was beginning to pick up steam. As the recession continues, GM and Ford face a double problem of sinking profits from sales and growing loan defaults as people cannot keep up auto payments.

"We are in a deteriorating economic environment and we are dealing, as all others in the industry are, with a very, very high level of bankruptcies of our customers," said Greg Smith, president and chief operating officer of Ford Motor Credit. Last month Smith replaced Donald Winkler, who was ousted after Ford announced it would need to pump several hundred million dollars into Ford Motor Credit, which makes the loans and leases.  
 
Part-time work, joblessness rise
In addition to the layoffs and plant closings projected at Ford, joblessness is on the rise across the country as workers bear the brunt of the economic downturn. Official unemployment climbed to 5.8 percent in December as 133,000 manufacturing jobs alone were shed in the month. With less than 50 percent of workers without jobs eligible for unemployment compensation, the real jobless figure is much higher.

Millions more workers have been forced to accept short hours or temporary work as the grip of the recession takes hold. The Wall Street Journal reported January 3 that since the recession began in March, 1.2 million workers lost their jobs and an additional million have had to work part-time. The number of workers who want to work full-time but have had their hours cut has climbed 34 percent to 4.2 million from 3.2 million in March, according to the Bureau of Labor Statistics.

Underemployment--regardless of how few hours somebody works each week--is not counted in the government's official joblessness figures, which only include those who have no work but are looking.

The Bureau reported that the average workweek for nonsupervisory personnel fell to 34.1 hours in November, from 34.3 hours last year. For the last three months in 2001 the average workweek was 34.06 hours, the shortest of any recession since hours were tracked starting in 1964.

The Journal reported many companies, hoping the recession will soon be over, are cutting back hours of work rather than carrying out layoffs in order to try to convince workers to stick around. The Hotel Employees and Restaurant Employees union leaders have said nearly 7,000 unionized hotel workers have faced a drastic reduction of work hours.

Behlen Manufacturing, a metal-fabricating firm in Columbus, Nebraska, reduced weekly hours of 400 factory workers and cut salaried employees' pay by 10 percent. IBM cut the hours of 20,000 workers and eliminated overtime in the company's microelectronics division. The company boasted that it only had to layoff 1,000 employees as a result.

Some 80,000 people lost their jobs in the last three months in New York City alone. The Fiscal Policy Institute, a research group in New York, found at least 76,000 additional garment workers, taxi and limousine drivers, and graphic artists have been forced into partial employment from full-time jobs since September.  
 
 
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