AM Online

Ford to cut jobs in US

Ford is to cut 500 jobs in the US - 10% of its workforce - after announcing a profit warning. Shares dropped 9.5% on the announcement.

The world's second largest carmaker is grappling with the consequences of federal safety investigations into its Explorer. Job cuts will be accomplished by voluntary redundancy or early retirement, said Ford chief executive Jacques Nasser.

The move to cut jobs was blamed on slower sales, a higher marketing spend to counteract tougher competition and the estimated £2.4m cost of Explorer recalls and lawsuits. The company is recalling 19.5m Firestone tyres.

Despite the costs involved in extending Explorer warranty and recalls, Ford's £11.1bn cash balance is expected to fund a generous share dividend.

The profits warning and job cuts package led to share price losses among European carmakers.

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