Productivity increase slashes loss at Ford UK

FORD UK cut its pre-tax loss from pounds 353m to pounds 92m last year, thanks entirely to productivity increases. However, the chairman, Ian McAllister - whose salary rose by 50 per cent - said the group was benefiting from a UK market that was recovering more strongly than anticipated, and from the success of the Mondeo.

Ford's lead in the UK market was eroded by Vauxhall in 1993, but it still held the first and second slots with the Escort and Fiesta, with the Mondeo climbing to fifth place overall on only nine months' sales.

A recovering home market pushed domestic sales up by 14.2 per cent to pounds 3.6bn, while exports dropped by 23 per cent to pounds 1.72bn. Overall sales remained almost static at pounds 5.33bn.

The productivity improvement of 9 per cent came from a combination of job losses and more efficient working practices. The UK workforce fell from 38,400 at the end of 1992 to 32,500 a year later, with reductions spread evenly across the plants.

Ford has also been installing the Japanese-style working practices that are common in other British car plants. Dagenham recently became the first UK operation to receive the internal Q1 quality award that is a prerequisite for further investment. Mr McAllister said the cost and quality of British-made vehicles were on a par with the best in Europe.

His salary rose from pounds 94,129 to pounds 140,591. A spokesman said this was because his bonus was tied to Ford's worldwide performance rather than to that in the UK.