Chief Executive Officer William Clay Ford Jr. said from the automaker's Dearborn, Mich., headquarters that five North American plants will be closed.
President and Chief Operating Officer Nick Scheele said 35,000 jobs, including 20,000 in North America, will be cut,
Other moves include cutting costs, improving quality in a slew of new upcoming products and selling off non-core assets.
Car brands cut
Mr. Scheele said the automaker will do away with "four low-margin vehicles -- the [Ford] Escort, [Mercury] Cougar and Villager, and the [Lincoln] Continental."
The move doesn't bode well for Mercury, a brand long struggling for its identity. Mercury will be left with just three vehicles. WPP Group's Y&R, Irvine, Calif., handles.
Mr. Scheele said Ford's Premier Automotive Group, which is comprised of the Aston Martin, Lincoln, Jaguar, Land Rover and Volvo brands, will play a key role in the turnaround, eventually accounting for more than a third of Ford's global profits.
Ford expects to achieve the turnaround by the middle of the decade.
$4.1 billion after-tax charge
Ford will also take a $4.1 billion after-tax charge in the fourth quarter of 2001 for the restructuring.
Mr. Ford, who became CEO 10 weeks ago, said the automaker's centennial is in 18 months.
"We've survived 100 years in a very tough business," he said. "We've faced tough times before. We will turn this company around."