The loss-making Ford Europe said on Wednesday it was scrapping plans to produce the Ford Focus at its Genk plant in Belgium, cutting 3,000 jobs.

"With lower industry outlooks, a larger number of competitors and escalating marketing costs, we must concentrate on maximizing our product line-up while minimizing our spending," said Lewis Booth, the president of Ford Europe.

A day earlier, the firm's German unit said it planned to axe 1,700 jobs by the end of this year through early retirement schemes.

The European cutbacks are one slice of a total of 12,000 job cuts to be announced around the world, according to the Wall Street Journal.

On Tuesday, Ford came to an agreement with the United Auto Workers union that will allow it to cut more jobs or close select plants in the US.

US employees were notified that Ford wants to eliminate some 3,000 salaried jobs by the end of the year.

Falling sales

The world's second largest car maker is struggling to shore up its finances amid dwindling sales and an uncertain economic environment.

A strategy of luring customers into showrooms with bargain deals has intensified the need to reduce costs.

The firm has previously warned that it was hoping to achieve a 10% reduction in salaried worker costs by the end of the year as part of its wider cost-cutting exercise.

"We need to significantly increase the pace of cost reduction in Europe if we want to return to profitability," warned Mr Booth.

The cuts follow a bout of retrenchment over the last two years during which the firm announced a total of 35,000 job cuts.

"It's a little hard to tell whether (the latest job cuts) are part of Ford's original turnaround programme or whether they are turning up the heat because they need to cut faster," said Burnham Securities analyst David Healy.

"It is probably a little of both."