Can Ford Bounce Back?

Jan. 23, 2006 — -- Ford, the nation's second-largest automaker, announced today it would shut down 14 facilities and lay off up to 30,000 workers -- a quarter of its work force.

The cutbacks come as no surprise; Ford has struggled with low sales and record losses for a decade. But it's devastating news for company employees and the communities that rely on Ford plants.

Today the general reaction in the business world to the company's turnaround plan ranged from tepid to troubled.

"In a nutshell: No, I don't think it's enough," said Kevin Tynan, senior auto analyst for Argus Research Company.

Added Peter Morici, an economist at the University of Maryland: "I don't believe that Mr. Ford knows how to resurrect his great-grandfather's company."

Some analysts say the plan won't tackle Ford's biggest problem: the high cost of pensions and health care for its retirees -- costs its foreign competitors don't have.

"Those costs for Ford represent about $1,000 dollars per car," said Mellody Hobson, president of Ariel Capital Management and an ABC News contributor. "So for every vehicle that they sell, they have those costs that they have to provide for right off the top. And that makes our foreign competition able to win, basically, on price."

There's also skepticism about whether Ford can come up with innovative vehicles that would help the company sell its way out of this crisis.

"The Ford 500 looks like a Bulgarian limousine from the Soviet era," said Morici.

Mark Fields, the young executive in charge of turning Ford around, says he's not worried about what outsiders say.

He says Ford can win if he can change the cautious corporate culture by telling workers "change or die."

"Because then you think about the challenge in a different way," he said. "And it goes from one of entitlement to 'let's go out there and compete.'"

There are some observers who are open-minded about Ford's promises to rebuild and retake the American road.

"It's time for a turnaround, and Ford's history has been a roller coaster, up and down," said Csaba Csere, editor-in-chief of Car and Driver magazine.

But even the optimists say if this plan fails, it's not out of the question that Ford -- once a symbol of American manufacturing might -- could end up in bankruptcy, or out of business.

ABC News' Dan Harris filed this report for "World News Tonight."