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Feb 6, 2009

Ford cuts 850 UK jobs amid 30% sales plunge

Ford, the US car giant, today announced that it was cutting 850 British jobs as new vehicle registrations plunged by 30.9 per cent, confirming the dire state of the transport market.

Ford said today that the job cuts were in response to the “serious economic situation”, and plans to reduce staff by between 400 and 500 at its Transit van plant in Southampton. A further 350 jobs will be lost across the company.

The company is the lastest carmaker to announce job cuts after sales of new vehicles have plunged as consumers cut back on spending while the price of materials, such as steel, has soared.

Last month, Honda put its British workers on an enforced four-month layoff while Nissan cut 1,200 staff at its Sunderland plant, Jaguar Land Rover reduced staff by 450 jobs.

Today, the Society of Motor Traders and Manufacturers (SMTM) said that new car registrations fell by 30.9 per cent on the year in January to 112,087.

Last month, the Government pledged to guarantee up to £2.3 billion of loans to the car industry to help it weather a slump in demand. However, the SMTM said today: “There is a clear need to stimulate demand for new vehicles in the UK market."

Private car sales fell by 27 per cent in January as consumers continue to rein in their spending, fuelling fears that the downturn could worsen. Howard Archer, of IHS Global Insight, the economic consultancy, said: "Sharply deteriorating car sales provide further clear evidence that consumers are very reluctant to spend, particularly on major costly items. This reinforces belief that consumers are likely to cut back markedly on their spending this year."

Purchases of fleet cars by companies dropped by 35 per cent in a further sigh that businesses are also cutting back investment sharply.

Source : TimesOnline
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