Ford warns on profits

Ford has warned that profits for the current quarter will not meet expectations as falling sales in the US continue to hammer the big car makers.

Ford said it would cut production in January with a series of plant shutdowns across the US.

It's clear that US economic growth is slowing, and surveys of consumer sentiment point to lower levels of spending in the future

Martin Inglis, Ford

The move follows similar profit warnings and production cuts from rivals General Motors and DaimlerChrysler.

It was the second time Ford has cut first-quarter production schedules for North America this month.

36,000 workers

The news came hours after General Motors said it would shut five North American plants during the first week of January because of slowing sales.

Martin Inglis, Ford North America president said: "It's clear that US economic growth is slowing, and surveys of consumer sentiment point to lower levels of spending in the future."

Ford is to produce 9% fewer vehicles than previously planned in the first three months of 2001.

Total output would be 17% lower than in the same period of this year.

The scale of the shutdown will vary during January, with the peak week's cut seeing about 36,000 workers in the US, Canada and Mexico temporarily laid off.

Global restructuring

Mr Inglis said Ford was making the cut in production now to ensure that it was not caught out by continuing falling demand.

Ford also warned that profits for the last three months of 2000 would be well below its earlier hopes.

Part of the blame for this was put on bad weather hitting production.

Ford also said a parts shortage in Europe cut into profits there.

Ford and General Motors are both in the process of global restructuring which is intended to reduce vehicle making capacity.

These changes are leading to the loss of thousands of jobs across the world, and include the ending of car production at Dagenham and Luton, in the UK respectively.