The No 2 US automaker said it expects to spend $8.5 billion on automotive capital spending this year. Other goals include: 5 per cent after-tax return on sales for North American auto operations; improved automotive operating results from South America and higher earnings from the European auto unit.

Ford also wants to boost earnings of its Ford Credit financing unit by 10 per cent. The Visteon parts unit expects to increase earnings and obtain $2 billion in new business.

The company said its Hertz Corp rental car affiliate is targeting record earnings for the year.

The Automaker also confirmed on Thursday that, based on the ``overwhelming positive reaction,'' it will make the Lincoln Blackwood sport utility vehicle (SUV), a move analysts had been expecting. It had been showing the concept vehicle at the Los Angeles and Detroitauto shows the past few weeks.

Ford disclosed the financial targets with employees and in a meeting with Wall Street analysts at the Detroit auto show. Ford, one of the better performing auto stocks, has made a practice of setting specific financial targets.

Also talking to analysts was new chairman William Clay Ford Jr. Ford stressed the automaker can be both sensitive to environmental concerns and have a profitable automotive business at the same time. Ford has said previously that having the company be environmentally conscious was one of his goals.

Ford officials also outlined the company's long-term plan to strengthen the identity of its six brands.

Ford said it is on track to meet or beat nearly all of its 1998 milestones. Ford's costs for the first nine months of 1998 were down $1.9 billion, assuming a basis of constant volume and mix. Its North American return on sales was 5.7 per cent. Europe had a profit of $267 million.

Two milestones Ford had difficulty with during the nine- month periodwere its South American operations and Ford Credit. Ford had a loss from its South America operations of $75 million versus its goal of a break-even year. Ford Credit's earnings were up 5 per cent during the nine months versus a goal of 10 per cent growth for the whole year.

Ford will report its 1998 fourth-quarter and full-year results during the third week of January. Analysts expect the automaker to report 1998 operating earnings of $5.20 a share, compared to $4.86 the previous year, according to First Call Corp. This year's earnings are expected to slip slightly to $5.19 a share.

Fourth-quarter earnings are expected to be $1.27 a share, unchanged from the same period in 1997, First Call said.

While Ford is working hard to cut costs, it is looking to boost sales and profits with the decision to build the Blackwood. The vehicle fuses the Lincoln Navigator full-size SUV's front cab and luxury interior with the utility of a pickup truck bed, albeit a shorter one. Analysts expect Ford to make the luxuryvehicle in 2000 as a 2001 model.

Ford did not say what Blackwood's price will be, but analysts expect it to list for $45,000-$50,000 and rack up generous SUV-like profits. For example, analysts estimate the Navigator generates pretax profits of $15,000 each.

The vehicle would be built on the company's popular F-Series pickup truck frame. AutoPacific analyst Jim Hall expects Ford to sell about 7,000 the first year and 10,000 the next. Ford did not say where the vehicle will be built.