BBC

Friday, 17 August, 2001, 14:58 GMT 15:58 UK Ford cuts up to 5,000 jobs

Chief executive Jacques Nasser faces slowing sales

Ford has confirmed that it plans to cut between 4,000 and 5,000 professional jobs by the end of this year.

The company also sharply lowered its profits forecast. The company now expects to earn about $0.70 a share before exceptional costs such as redundancy payments.

This is well below Wall Street's consensus estimate of $1.20 and Ford's own previous forecast of earnings of $1.25-1.35 a share.

The job cuts will affect 10% of the car maker's white collar workforce in North America and will cost the Detroit-based firm about $700m.

The company hopes to make the cuts through retirements and voluntary redundancies.

"The voluntary separation program is a difficult but necessary action," said Ford president and chief executive Jacques Nasser.

"These actions will help us operate the business more efficiently, streamline our organisation, and align our skill base with future needs" he added.

Falling sales, legal trouble

Ford, the world's second biggest car maker, has reported falling US sales this year.

Over the past 12 months, Ford has recalled 19.5 million Firestone tyres on its vehicles after the tyres were linked to about 200 deaths and 700 injuries in accidents.

It has seen its US market share wither under attack from foreign car makers, just as rival General Motors revived its truck business.

And it has faced a number of quality problems, from recalls to low scores on industry quality surveys.

Not alone

Ford is not the only US car maker being forced to make job cuts to remain competitive while the US economy slows.

Earlier this year DaimlerChrysler said it was cutting 26,000 jobs at Chrysler, and General Motors said it planned to cut 6,000 posts in North America this year.

Ford said it would record a charge of $700m in the fourth quarter to cover the costs of job losses, which it hoped to achieve largely through voluntary retirement.

The company will also take a $200m charge in the third quarter as a result of a write down in the value of some investments.

In the second quarter of 2001, Ford lost $752m, including the cost of replacing 13 million Firestone tyres, though analysts had expected worse and greeted the results favourably.

The group's worldwide vehicle sales during the second quarter of 2001 dropped 7% compared with the second quarter of 2000.

-- Anonymous, August 18, 2001