Ford supplier may cut 7,700 jobs

Ford's suppliers are feeling the pain of its sales decline

Lear Corporation, a US car parts firm, could cut up to 7,700 jobs after Ford and General Motors, two key clients, reduced production amid a sales slump.

The cuts will affect workers at Lear factories in the US and Europe with the extensive restructuring costing the company up to $250m (£136m).

Ford and GM face mounting problems, with the former warning of falling profits twice in the last three months.

Michigan based Lear employs 110,000 staff in 34 countries.

Extreme challenge

Ford and GM are vigorously cutting costs in an effort to combat falling sales in the US and intense competition from foreign rivals such as Toyota and Nissan.

Experts said Lear - which makes a range of parts including car seats and door panels - had become overly reliant on America's two largest car manufacturers and that it would also seek to broaden its client base.

Lear said it eventually planned to relocate several factories to countries with lower production costs, resulting in a likely reduction in its current workforce of between 5% and 7%.

"We are implementing this restructuring plan to improve our overall competitive position in light of extremely challenging industry conditions," Bob Rossiter, Lear's chief executive, said.

The company, which generated sales of $17bn last year, is also having to revise its profit forecasts for 2005.