Cutting costs trims Ford losses

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Ford has managed to halve its latest losses, but warned that it still expects to fail to make a profit in 2008, after continuing weak US sales.

Reporting its results for the last three months of 2007, the US car giant made a net loss of $2.8bn (Â£1.4bn), compared with $5.6bn a year earlier.

Ford said the narrowing of the loss had come from its continuing cost-cutting work and increased profit margins.

It is now offering an extra 54,000 US staff redundancy or retirement deals.

Ford has already reduced its US workforce by 35,500 since the end of 2005, as it aims to return to profitability.

'Challenging'

Looking ahead, Ford chief executive Alan Mulally said the US car industry remained "challenging", not helped by signs that the economy was slowing.

Overall, our [turnaround] plan is working and we continue to show progress Ford chief executive Alan Mulally

Ford's revenues for the fourth quarter of 2007 totalled $44.1bn, up from $40.3bn a year earlier.

While Ford continues to struggle in the US, its overseas operations are in much better shape.

Its $1.6bn fourth-quarter loss in North America compares with a $223m profit for its European operations and a $418m profit in South America.

"Overall, our [turnaround] plan is working and we continue to show progress," Mr Mulally said.