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Monday, 3 December, 2001, 20:37 GMT
Ford cuts more jobs as sales flag
Ford Explorer SUV
Recalling Firestone tyres on the Explorer contributed to the loss
Ford is planning to save about $300m a year by sacking some 600 blue-collar workers in New Jersey.

The cuts, all of which affect employees who are paid by the hour, follow the loss of 5,000 administrative jobs earlier this year. Another 30 salaried staff are also being laid off from the New Jersey Edison plant.

Also for the chop are the company's contributions to so-called "401(k)" employee savings and investment plans from 1 January onwards.

On top of that, 2,200 top managers will forgo bonuses for 2002, and salaried employees will see their healthcare plans get more expensive.

The car company is in deep financial trouble, after a year of sliding sales and huge payouts after a massive recall programme.

The fiasco - which saw losses in North America of $1.53bn for the first nine months of 2001 - has already cost its chief executive, Jacques Nasser, his job.

Necessary evil?

Nasser's replacement, chairman and chief executive Bill Ford, said the decisions were "painful but necessary".

And he warned: "More touch decisions will follow in the months to come."

The moves came as the company announced that sales in November were up 5% from the same month the previous year, driven by widespread cheap financing deals.

Other car companies, including General Motors, have seen the same effect, with light trucks - the category which includes the hugely popular "sports utility vehicles" like Ford's Explorer - gaining the most.

But the dealmaking has flattered the figures, and taking the whole year to date into account, sales are down 6.6% on January-November 2000.

Deal frenzy wears off

Car sales have near-single-handedly kept consumer spending high amid the layoffs and wage freezes which have accompanied the post-11 September downturn.

But according to Ford, that boost is now at an end.

Sales fell off "noticeably" once the deals came to an end on 20 November, the company said, and predicted sharply lower demand in the months ahead.

It is planning a "cautious" production schedule for the first quarter of next year, it said, setting a target of 980,000 vehicles - 9% lower than the January-March quarter of 2001.

See also:

29 Nov 01 | Business
Low-speed crash tests hit Ford
29 Nov 01 | Business
Ford 'to cut thousands of jobs'
16 Nov 01 | Business
Ford job cut threat
30 Oct 01 | Business
Ford chief Jacques Nasser ousted
17 Oct 01 | Business
Ford reports huge loss
16 Sep 01 | Business
US motor industry suffers shortages
20 Aug 01 | Business
Jobs reprieve at General Motors
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