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Thursday, 19 April, 2001, 14:08 GMT 15:08 UK
Ford profits fall 41%
Ford Street Ka
Ford profits in Europe from restructuring
Ford has reported a 41% drop in profits for the first three months of 2001, blaming a slowdown in US vehicle sales and production as the economy softens.

The world's second largest carmaker said global earnings dropped to $1.13bn (790m) in the first quarter compared with $1.93bn in the same period of 2000.

"Our first-quarter performance shows the underlying strengths of Ford Motor Company in an uncertain economic environment," Jacques Nasser, president and chief executive, said in an optimistic statement.

But despite the poor figures in the US, Ford's European operations, which it began a restructuring last year, recorded a profit of $88m in the first quarter from a $3m loss last year.

Ford, which announced the end of car making at its Dagenham plant in the UK last year, turned a loss in Europe of $30m in 1999 into a profit of $33m in 2000.

Performance cars

Nasser said that the company expects its 2001 performance to be enhanced by the introduction of new vehicles brands, including the Land Rover division's Freelander model.

Ford's other British subsidiary, the luxury Jaguar marque, on Thursday revised downwards its the sales targets of 100,000 a year for the soon to be launched X-type, also known as the Baby Jag.

Jaguar managing director Jonathan Browning told Reuters in an interview that X-type sales will reach around 100,000 a year in 2005 or 2006, bringing Jaguar's overall sales to around 200,000.

Last November, when Jaguar unveiled the first photographs of the X-type, Browning reckoned that sales would reach 100,000 by 2003 or 2004.

Jaguar is part of the Premier Automotive Group which groups Ford's premium brands including Land Rover, Volvo, Aston Martin and Lincoln.

Auto earnings

Ford said earnings from its core North American operations fell to $754m from $1.67bn in the first quarter last year.

The company's US vehicle sales fell 16% in the first quarter, reflecting the economic slowdown and flagging consumer confidence.

It was the second major Detroit automaker to report a weak but better-than-expected performance in the first quarter after General Motors reported a 88% fall in first quarter earnings on Wednesday.

Ford's shares have strongly outperformed those of its cross-town rival GM, the world's leading automaker, so far this year.

They rose more than 19% in the first quarter, while GM's edged up less than 2%.

Explorer hangover

Ford is still struggling to put last year's uproar over deaths and injuries in rollovers of its popular Explorer sport utility vehicle behind it.

Deadly blowouts and tread separations in Firestone tires, many of which were fitted as standard equipment on Ford vehicles led by the Explorer, have been linked by federal regulators to more than 170 deaths and about 500 injuries in the United States.

Ford said the tire recall cost it $500m last year, evenly divided between the third and fourth quarters.

The company has admitted it may have to pay out more than $10bn in damages in safety-related lawsuits.

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