WHEN Ford unveiled a dramatic turnaround plan earlier this year there looked to be serious industrial strife brewing.

Facing massive losses, the US carmaker wanted to close factories and make thousands of staff redundant in an attempt to cut its costs and streamline the business. Everyone wondered how the belligerent unions would react. They need not have worried.

By the time a company-imposed deadline for volunteers to come forward expired last week, almost half the US workforce had asked to leave.

Some 38,000 people had opted to take voluntary redundancy terms rather than stay.

And Ford has agreed to let every one of them go.

The mass exodus will be the biggest in US car-making history, beating the 34,000 departures agreed by General Motors last year.

So many employees want to go that Ford will be forced to hire temporary staff to keep its production lines running.

Ford originally hoped to lose 30,000 jobs, and has already wielded the axe elsewhere. So far this year, about 20,000 white collar workers have been asked to go.

The sheer number of people wanting out must hurt Ford chief executive Alan Mulally, but he knows the company must become more combative if it is to see off the challenge from Japan and Korea.

When the numbers were announced, he simply said: "We know in many cases decisions to leave the company were difficult for our employees.

"The acceptances received through this voluntary effort will help Ford to become more competitive."

Every US motor manufacturer is hurting. They face a potential double whammy: rising employee costs (pensions and healthcare add up to $1,400 to the cost of every car) and falling sales.

Ford, in particular, has been caught short as US buyers trade in their gas-guzzling SUVs and pick-ups for smaller, more fuel-efficient, vehicles. New models are coming, but right now Ford dealers have the wrong mix on their forecourts.

No wonder losses reached a terrifying $5.8bn in the three months to September - the worst set of figures for nearly 14 years.

Worse still, the strength of the dollar has made Japanese imports particularly appealing, but even the big foreign companies have been forced to offer incentives to keep punters buying.

The latest round of cuts will not be cheap. In order to keep the powerful United Autoworkers Union on side, Ford was forced to agree very generous redundancy terms. Lump sum offers of up to $140,000 are on the table for time-served workers.

Another alternative is four years' free college tuition and half-pay for younger employees, who want to retrain.

Analysts reckon Mulally is doing the right thing by cutting the workforce to meet retail demand.

And this month Ford went further, putting, among others, the whole of the Volvo car company up as security for $18bn in loans to help pay for its painful restructuring.

So far, Ford's US woes have had little impact in Europe, but its workers on this side of the Atlantic are undoubtedly nervous.

But production of the Fiesta ceased at Dagenham four years ago, and the engine factory that replaced it is doing relatively well.

Unions over here are correct when they say the UK workforce has already swallowed it's bad medicine - now it's the turn of the US.