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Ford will also suspend matching contributions for 401(k) retirement accounts for U.S. salaried employees as of Jan. 1, 2009.
"The global auto industry is facing unprecedented challenges," Chief Executive Officer Alan Mulally said in a conference call Friday morning. "The turbulence in the worldwide economy continues to undermine consumer confidence and impact our business, as do the tight credit markets."
General Motors, which recently suspended merger talks with privately held Chrysler, kicked off its year-end "Red Tag" sale on Tuesday, several weeks ahead of when the sale normally starts. GM will also suspend product development, another measure to help conserve cash.
GM was the largest U.S. corporation by revenue as recently as 2000, and the company's market capitalization peaked at $52 billion that year. Its market cap has since shrunk to $2.72 billion.
Help from Washington?
Meanwhile, top executives from Ford, GM and Chrysler met with House Speaker Nancy Pelosi, D-Calif., on Thursday to talk about getting more financial help.- Talk back: Should we bail out the automakers next?
The Big Three are expected to ask for an additional $25 billion in bridge loans. Congress approved $25 billion in credits earlier this year to help the companies make the transition to more fuel-efficient vehicles.
"It was a very frank discussion about the problems that confront the auto industry," Rep. George Miller, D-Calif., told CNBC Friday morning. "There was an awful lot of focus on what it is the government's going to have to do to keep this industry alive."
The auto industry "is in need of life support," Miller said.
"In terms of the financial assistance that we're looking for, I think one of the things that is going to be key is federal guaranteed loans," Detroit Mayor Ken Cockrel Jr. told CNBC. "This is not just a city of Detroit problem, it's national problem and a global problem."
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"We certainly intend to make sure the new Obama administration understands and appreciates the immense significance of our industry and the issues facing our business," GM North American President Troy Clarke told auto suppliers Wednesday night. "The cost of support to the auto industry is cheap when you consider the potential ramifications and future benefits."
One analyst thinks Obama's win is a good thing for the auto industry.
"We think the Obama presidential victory and the coming shift in party representation in Congress increases in the likelihood of additional financial assistance to the automotive industry, above the already approved $25 billion in loans," S&P auto analyst Efraim Levy said in a research note on Wednesday. "Our expectation reflects the number of direct and indirect jobs at risk from the industry, as domestic automakers struggle amid a deep industry recession."
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