Ford warns over UK sales slide

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Ford has issued dire warnings about the future of the company in the UK amid sliding market share and a threat to the Halewood plant on Merseyside, according to internal minutes.

At a meeting with union leaders last month senior management revealed the depths of their concern about the profitability of Ford of Britain, which has incurred a loss of $2.9bn over the last seven years.

Bob Hill, personnel director, confirmed that market share had dropped below 20 per cent for the first time from a high of 26 per cent in the 1980s.

"While the market for cars and light vehicles has improved during the last year, Ford has been steadily losing share," he told them.

The situation was the same for the European operation, but Mr Hill was at pains to emphasise that it was the UK that was faring "worst of all".

Speaking to representatives of white collar staff, Mr Hill singled out the Escort as the source of most anxiety. Market share of the car - which is made at Halewood, Saarlouis and Cologne - had plummeted from 10.8 to 6 per cent.

The vehicle's lack-lustre performance in the market place was putting a "heavy strain" on Ford Europe, which is thought to be heading for a pounds 1bn loss this year, and was a big contributor to the deficit in Britain.

Ford wants to manufacture its replacement, codenamed the CW170, at one of the plants only. According to the minutes, Mr Hill pointed to the cost involved in "dual and triple sourcing of models across Europe".

Mr Hill was said to be "not optimistic" about the future of the company but said that he would be fighting "as hard as anyone" to ensure that the CW170 was built at Halewood. A decision on the new Escort will be made late in January or early February, the minutes reveal.

Ford's personnel director gave a number of reasons for Ford's poor performance. There were "too many suppliers chasing too few customers" and there was "global overcapacity" of nearly 20 million vehicles and rising.

The company's fixed costs were also higher than their competitors, particularly in product design. "Flattening of prices in the market have all but removed any profitability from cars and light vehicles," he said.

At the meeting, union leaders reminded Mr Hill that despite his pessimistic prognosis, they would not tolerate any compulsory redundancies.

Tony Woodley, national officer of the Transport and General Workers' Union, which represents most of the manual workers at Ford, thought it unlikely that management would take the manufacture of the Escort away from Halewood.

He commented: "It would be politically and industrially unacceptable if they manufactured the Escort replacement elsewhere."