Worries over UK jobs as Ford slashes staff

13 April 2012

Thousands of British jobs could be under threat after car giant Ford announced plans to axe one third of its work-force in North America.

After a crisis board meeting in Michigan, the automotive group said 14,000 white-collar jobs had to go in the US as it strives to cut costs and compete against Japanese rivals. All of its 75,000 factory workers in the country are also being offered redundancy, which will result in another 30,000 job cuts.

The transatlantic overhaul has raised fears of a similar slash and burn approach in Britain. Ford employs more than 33,000 people here, where it builds loss-making luxury brands such as Aston Martin, Jaguar and Land Rover as well as the main Ford models.

The Transport and General Workers' Union warned: "With the company looking at every aspect of its global operations we will look very closely at what this could mean for workers in the UK. We will not be complacent."

Production line workers fear tens of thousands of jobs could be at risk.

The gloomy news came after a bad week for British workers. Swallow, one of Britain's biggest private hotel and pub businesses employing 7,300 people, called in the administrators this week, leaving the fate of its workers uncertain.

Norwich Union-owner Aviva announced plans to slash 4,000 jobs. And the influential International Monetary Fund issued a stark warning that Britain will see the biggest jump in unemployment of any advanced economy this year.

The prospect of another motor industry crisis would be a blow to the Labour government in the wake of closures at Peugeot and Rover, and job cuts at Vauxhall. Ford's key plants are in Dagenham and Southampton.

It has already put the 'for sale' sign over its Aston Martin brand, which employs nearly 2,000 people in Britain. Jaguar is also tipped to be sold, possibly to JCB boss Sir Anthony Bamford.

Family scion Bill Ford, who bailed out of the top job two weeks ago, said the US cutbacks plans have no bearing on the future for the British employees, but experts believe it is only a matter of time before Ford looks further afield to make savings.

Ford has in trouble for years, as rivals built cheaper models by shifting production to Asia and Eastern Europe. It made losses of £740m during the first half of this year. Investors are clamouring for drastic action to curb costs and want new cars and truck models to be rolled out more quickly.

In January Ford said 30,000 American factory worker had to go by 2012, but its growing problems mean this process has been brought forward. The job cuts are now expected to be made by 2008, four years ahead of schedule. The accelerated plan, dubbed the Way Forward, aims to slash annual costs by £2.7bn.

Its redundancy packages for factory workers are quite generous and could be worth as much as £74,000 each. However, UK workers would not be so richly compensated because our labour laws are not so strict.

Despite the aggressive measures, Ford said it would not be profitable before 2009. Bill Ford said: "These actions have painful consequences for communities and many of our loyal employees.

But rapid shifts in consumer demand and continued high prices for commodities means we must continue working quickly and decisively to fix out business."

The recovery plan will be implemented by high-flyer Allan Mulally, a former Boeing boss who was parachuted in as chief executive of Ford earlier this month.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in