AM Online

Ford to cut jobs in US

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

Jacques Nasser, Ford chief executive, said job cuts would be accomplished by voluntary redundancy or early retirement.

Ford is grappling with the consequences of federal safety investigations into its Explorer. It blamed the job cuts on the estimated £2.4m cost of Explorer recalls and lawsuits, slower sales in the US and a higher marketing spend to combat tougher competition. Ford 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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