Carmaker Ford hit by $123m losses

Ford is facing competition from Japanese producers

Carmaking giant Ford posted a surprise second-quarter loss of $123m (£66.5m) as sales of sport utility vehicles (SUV) fell on higher petrol prices.

The firm is shutting 14 plants and cutting up to 30,000 manufacturing jobs in North America by 2012.

Ford, which recorded a profit of $946m a year ago, also saw US vehicle sales fall 7% in the second quarter.

Earlier this month, it announced it was to cut its shareholder dividend in half, dealing a blow to investors.

Then, it announced a 50% cut in its third-quarter dividend to five cents.

'Not getting easier'

Revenue in the second quarter fell $2.5bn from last year to $42bn.

In a statement after the quarterly results, chairman Bill Ford said: "We've seen an improvement in North America results in the second quarter, but the external factors we face aren't going to get any easier."

Critics say Ford has relied too heavily on sales of SUVs and trucks in recent years, limiting development of other models.

The firm's market share has slipped amid fierce competition from more efficient Japanese producers, such as Toyota and Nissan.

Ford is embarking on a massive cost-cutting drive to make it more competitive, particularly in its home market.