| 850 Jobs are axes by FORD UK | Between 400 and 500 jobs will go at the company's Transit van plant in Southampton, while another 350 jobs will be lost through a restructuring of salaried staff.
Ford, which employs approximately 13,000 people in the UK, said the job cuts were a response to the "serious economic situation affecting the automotive industry". It added that non-production days, an option pursued by other UK manufacturers such as Honda, were "not affordable in the absence of a significant improvement in customer demand".
The company also announced it wants to "re-evaluate" this year's pay increase of 5.25pc because trading conditions have worsened "significantly" since it was drawn up last October.
Such a step would "not normally be contemplated" but these are "unprecedented circumstances", it added.
The dire summary of the industry by Ford comes just days after it announced an increase in its UK prices, including on the best-selling Fiesta and Focus, by an average of 4.7pc because the falling value of sterling is eroding sales margins.
Sales of new cars are plunging in the UK, with new figures from the Society of Motor Manufacturers and Traders revealing a 30.9pc fall to 112,087 vehicles in January.
John Fleming, the Ford of Europe chairman and chief executive, said the downturn meant "decisive action" was required by the company.
"Those companies which act quickly in taking the right decisions will be those who not only survive but who emerge strongest from this deep recession. We aim to be one of those who emerge stronger than before," he said.
Last week, Lord Mandelson, the Business Secretary, unveiled ?2.3bn of loan guarantees for the industry. In the US, General Motors and Chrysler received a rescue package before Christmas worth $17.4bn (?11.9bn), which Ford decided to opt out of.
Paul Everitt, the SMMT chief executive, called for more Government support for the sector.
"There is a clear need to stimulate demand for new vehicles in the UK market," he said.
"A number of EU member states have launched scrappage incentive schemes, which have the benefit of boosting consumer confidence and delivering significant environmental improvements. The UK motor industry is urging the UK Government to introduce a similar scheme and help sustain jobs and businesses throughout the sector."
Reports yesterday claimed that, with the sector struggling, Ford is in talks to sell Volvo to Chinese car maker Geely. However, a spokesman for Geely, which makes London black cabs as part of a joint venture, said it has no plans to buy the Swedish car group.
Credits Telegraph.co.uk |
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