Makeover drives Ford £3.5bn into red

FORD has reported a net loss of $5.07bn (£3.5bn) in the final quarter of 2001 as it absorbed the huge cost of a restructuring that will drastically change America's oldest carmaker.

The loss for the year was $5.45bn. Operating losses excluding the one-off charges were $782m, or 44 cents a share. The big hit to earnings was a $4.1bn charge for the makeover, which will include shutting five plants, ending four product lines and cutting thousands of jobs in Europe and the US over the next few years.

Ford said, however, that it was increasing its production schedule in response to better-than-expected consumer demand sparked by price cuts. And in Europe, full-year profits were $266m, a sharp turnaround from a $35m loss a year earlier.

Ford's premier European car group - Jaguar, Volvo and Land Rover - delivered profits for the parent company. Analysts believe the group is key to Ford recapturing its lustre. Sales of Volvo and Jaguar set records in 2001 as they captured increasing market share in the US.