Ford Motor (NYSE:F) says it will cut 12,000 jobs, or 3.5% of its worldwide workforce of 350,000. DaimlerChrysler (NYSE:DCX) also reportedly plans to ax employees.

Recent agreements with the United Auto Workers union give the Big Three -- Ford, DaimlerChrysler, and General Motors (NYSE:GM) -- more "flexibility" in closing plants and laying off employees. All three labor under worldwide industry overcapacity and aging workforces and are desperate to slash expenses. At General Motors alone, about half of its 118,000 employees can retire over the next five years, according to The Wall Street Journal. (No wonder Congress and various accounting standards bodies are toying with how to account for pension liabilities. If they grow too big, just change them.) Things don't look good.

Wait a minute. Did we say these are the Big Three? Actually, Toyota is the third-largest auto power in the U.S. This burns DaimlerChrysler, which wants to cut 5,000 jobs through buyouts, according to the Detroit Free Press.

Ford targets $7 billion in profits by 2005, after losing not much less than that in the last two years. General Motors is barely profitable and DaimlerChrysler was $1.1 billion in the red last quarter. Their shares have underperformed the S&P 500, including dividends, for one and five years, though DaimlerChrysler is slightly ahead for two years. Their dividends are some consolation, but it may be years -- if ever -- before their expenses and capacity decline to a healthy balance with demand.

Speaking of dividends, Ford, General Motors, and DaimlerChrysler shares sport 3.7%, 4.9%, and 4.6% dividend yields, respectively. Are they as smart as other high-yield options? Find out with a free trial of Mathew Emmert's Motley Fool Income Investor. And don't wait to join other thoughtful auto industry observers on ourFord andGeneral Motorsdiscussion boards.