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Ford Credit Canada sells auto loans

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DEARBORN, Mich. (CP) _ Ford Credit Canada Ltd., a subsidiary of Ford Motor Co. (NYSE:F), says it has sold a number of its auto loans for $1.2 billion Cdn.

The deal, with an unnamed financial institution, is ``the first whole-loan sale of a portfolio of retail instalment sale contracts,'' the company announced late Thursday.

Ford Credit Canada said it will continue to service the contracts and will use the proceeds for general business purposes.

Parent firm Ford Motor Credit is one of the largest auto finance companies, with about 14,000 employees and $150 billion US in receivables.

Thursday's sale is part of a streamlining of Ford Motor to focus on its core automaking business.

In late January, the company announced plans to cut up to 30,000 jobs and close 14 plants over the next six years under a restructuring designed to curb losses at its North American operations.

North America's No.2 automaker plans to reduce its workforce of 122,000 people on the continent by 20 to 25 per cent _ between 25,000 to 30,000 jobs _ including about 2,300 in Canada by 2012.

Plants to be idled through 2008 include the St. Louis, Atlanta and Michigan Wixom assembly plants, along with Batavia Transmission in Ohio. Two other North American assembly plants to be idled will be named later this year.

Canadian plants appeared to take less of a hit than had been feared, but the 2,300-worker St. Thomas, Ont., assembly plant will be reduced to one shift _ costing about 1,200 jobs there.

Including the closure of Ford's casting plant in Windsor, Ont., announced after contract negotiations last fall _ which will cut 500 jobs directly and may lead to as many as 1,100 job losses _ about 2,300 Canadian workers could be affected by the Ford streamlining.

The St. Thomas plant makes Grand Marquis and the Crown Victoria vehicles, which haven't been selling well lately. By moving from two shifts to one shift in 2007, the St. Thomas plant could be eliminating up to half its jobs.

Ford reported earnings of $2 billion US in 2005, down 42 per cent from last year's profit of $3.5 billion. It was the third straight year the automaker has reported a profit, but gains in Europe, Asia and elsewhere were offset by a loss of $1.6 billion US in North American operations.

Ford reduced employment in 2005 by 10,000 people due to layoffs, buyouts and attrition. The Detroit-area company has around 300,000 employees worldwide.

The restructuring is Ford's second in four years. Under the first plan, Ford closed five plants and cut 35,000 jobs, but its North American operations failed to turn around.

On the New York Stock Exchange Thursday, Ford shares closed down 10 cents to $8.16 US, on trading of 15 million shares.

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Ford Credit Canada sells auto loans
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