compile help

I am trying  to build expat for a PPC system by cross compiling.
I am able to compile object files successfully, by simply redefining
the CC variable as:

CROSS_COMPILE=ppc_85xx-
CC  = $(CROSS_COMPILE)gcc
CXX  = $(CROSS_COMPILE)g++
LD  = $(CROSS_COMPILE)ld
AR  = $(CROSS_COMPILE)ar
AS  = $(CROSS_COMPILE)as

INCLUDES = -I$(srcdir)/lib -I$(PPC_INCLUDES) -I.
LIBTOOL = $(SHELL) opt/eldk4.1/ppc_85xx/usr/bin/libtool
.....and so on


however, the linking seems to use the libtool defined by the LIBTOOL
env variable, I get the following error during link:

/bin/sh opt/eldk4.1/ppc_85xx/usr/bin/libtool --silent --mode=link
--tag=ppc_85xx-gcc ppc_85xx-gcc -I./lib -I. -g -O2 -Wall
-Wmissing-prototypes -Wstrict-prototypes -fexceptions
-DHAVE_EXPAT_CONFIG_H   -no-undefined -version-info 6:0:5 -rpath
/fileserver/zk/opt/eldk4.1/usr/lib  -o libexpat.la lib/xmlparse.lo
lib/xmltok.lo lib/xmlrole.lo
/usr/bin/ld: lib/.libs/xmlparse.o: Relocations in generic ELF (EM: 20)
lib/.libs/xmlparse.o: could not read symbols: File in wrong format
collect2: ld returned 1 exit status
make: *** [libexpat.la] Error 1

Why does /usr/bin/ld come out? It should be ppc_85xx-ld...
Any help here would be pretty appreciated...