Car giant Ford to axe 850 UK jobs

Feb 5 2009

Car giant Ford is to axe up to 850 jobs in the UK in response to the "serious economic situation" affecting the motor industry, the firm announced.

The Transit van plant in Southampton will be hardest hit, with between 400 and 500 jobs set to be lost by May. Another 350 jobs will be lost across the company through a restructuring of salaried staff.

Ford also announced that it wanted to "re-evaluate" this year's pay deal of 5.2%, saying that its business situation had worsened "significantly" since it was drawn up last October.

The announcement was made as figures showed new car sales slumped by more than 30% last month compared with January 2008.

The 30.9% fall was the biggest monthly figure since 1974, said the Society of Motor Manufacturers and Traders.

John Fleming, chief executive of Ford of Europe said: "As demand across the industry continues to fall, we are facing some immediate and major challenges which require us to take decisive action to reduce all our costs, and to do so in ways which will best protect our business for the long term and ensure that we are well positioned to be among the winners when recovery does come.

"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."

A total of 112,087 new cars were registered in the UK in January. The SMMT stepped up its call for the Government to offer financial aid to owners of older cars to help them buy newer models under a so-called scrappage incentive scheme.

SMMT chief executive Paul Everitt said: "There is a clear need to stimulate demand for new vehicles in the UK market. 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."