BILL FORD, the chief executive of the eponymous carmaker, last night stunned the American auto industry by announcing plans to close as many as 14 factories and cut up to 30,000 jobs.

The cuts, part of Ford’s long-awaited “Way Forward” restructuring plan, were much more severe than analysts had predicted.

Before Mr Ford made the announcement to a room packed with analysts at the company’s headquarters in Dearborn, Michigan, most thought that between five and ten plants would close in North America and that the job cuts would not exceed 25,000.

Analysts now believe that it is more likely that the job cuts will exceed 25,000, with about 5,000 white-collar workers facing the axe. The company’s executive branch of 53 directors will also be reduced in number by about 10 per cent.

Of the 14 factories to close, seven will be assembly plants, three of which have already been singled out for shutdown, with two more to be chosen this year. The cuts and closures will reduce Ford’s overall costs by about $6 billon by 2010, the company hopes.

Mr Ford gave an impassioned speech, peppered with historic references to his great-grandfather, who invented modern motor vehicle manufacturing with the first assembly lines in Dearborn more than 100 years ago. He said that to survive Ford must constantly innovate and give the customer what they want before they know that they want it, rather than relying on the same old models year after year.

“My great-grandfather once said: ‘If I’d asked my customers what they wanted, they would have said ‘a faster horse’,” Mr Ford said, before describing future innovations in the works such as a greater number of hybrid vehicles, night vision windscreens and collision-avoidance systems.

In a further twist, Mr Ford revealed that the company would no longer issue annual profits forecasts to Wall Street. Ford stopped issuing quarterly profits guidance more than a year ago. “We cannot succeed in the long run if we are focused only on the short term,” Mr Ford said.

Mark Fields, the head of Ford’s Americas operations, was the chief architect of the restructuring plan. Later he revealed that the struggling car company will shy away from its once-popular Explorer and other traditional sports utility vehicles in favour of so-called crossover vehicles that are similar in design to SUVs but with more of the attributes found in a saloon. Ford, along with General Motors, has struggled to keep its head above water for much of the past decade as rising labour and raw materials costs combined with intense competition from Asian carmakers to cripple their domestic market.

Ford revealed that fourth-quarter revenue rose to $47.56 billion (£26.6 billion) from $44.92 billion a year earlier. Automotive revenues jumped to $41.82 billion from $38.87 billion. For the full year, Ford’s North American vehicle operations made a pre-tax loss of $1.6 billion; worldwide automotive operations swung to a pre-tax loss of $1 billion from a 2004 profit of $850 million.

Ford made a profit of $2 billion in 2005, however, thanks to gains from the sale of the Hertz rental car business and big profits at its financing arm.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive