Stagnant car market forces Ford to axe 850 workers

Ford UK announced today that it will be shedding up to 850 jobs because of the credit crunch.

Bosses at the car giant have ordered a major economy drive across the country in the wake of plummeting sales.

Jobs will be cut in Dagenham — where car production ceased in 2002 but diesel engines are still made.

But the Southampton plant will bear the largest brunt with between 400 and 500 jobs expected to be lost. However, the future of Southampton is generally uncertain; the plant produces the Transit and Ford has yet to commit itself to a new model.

The company, as with all other car manufacturers, has been badly hit by the credit crunch. As the economy plummets, former potential buyers have put a new car at the bottom of their shopping list.

A source from Ford said: "There are hundreds of jobs going — but there are fears it won't be the last of the cuts.

"With people in other industries worried sick about job security, purchase of a new car comes well down the list of priorities."

The cuts come days after Ford and Vauxhall announced they were increasing prices by up to five per cent.

Critics denounced this move as "idiotic" and "suicidal", and Simon Empson managing director of independent dealer Broadspeed.com said: "The manufacturers are going to write off the UK market for the foreseeable future."

Overall, UK car sales fell by around 30 per cent last month. But in spite of this a Ford spokesman has warned of even more price increases.

He said: "Additional prices rises are likely unless there is a strengthening of the value of the pound against the euro."