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Old 09-08-2004, 09:09   #1 (permalink)
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EU:Ford, unions upbeat before key Land Rover talks

Ford, unions upbeat before key Land Rover talks

Reuters

FRANKFURT - Ford Motor Co and labor unions sounded an upbeat tone before crucial talks on Wednesday about the future of Land Rover.

The number-two U.S. automaker has given Land Rover workers and managers this deadline to propose efficiency and quality improvements at the Solihull plant in the British Midlands. Talks are set to start at around 1600 GMT.

"We are genuinely hopeful that the outcome this time will be successful," Land Rover spokesman Don Hume said. "The unions have separately suggested that they are very confident of success, so between the two it looks increasingly likely that we should come away from this with a plan for the future."

In May, Ford told Land Rover, which it bought in 2000, to put forward a detailed plan to improve quality and achieve world-class competitiveness in five years.

Labor representatives briefed union officials at Solihull this week about progress on the so-called "road map" talks that aim to change operating and working procedures at the plant.

The Transport and General Workers Union said shop stewards had given "an extremely positive response which (unions) believe will enable a successful outcome of the 'road map' discussions with Mark Fields of Ford Europe" on Wednesday.

Union members at the plant will be balloted on the proposals once they are published, the union added.

Fields heads Ford's Premier Automotive Group (PAG), which includes the Jaguar, Land Rover, Aston Martin and Volvo brands.

Hume said any failure of the talks -- suspended a week ago to let Land Rover improve its road map offer -- would not prompt Ford immediately to shut the plant, an icon of British industry.

"The alternative clearly was or is that if there was no road map then, as Mark Fields said, the future of the plant would be less secure than it currently is, but that clearly doesn't signal immediate closure," he said. "It would have been a slow starvation of investment."

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Land Rover languished at 28th place in the J.D. Power and Associates 2004 initial quality study, well below the industry average and badly trailing Jaguar, which was number three.

Britain's Jaguar said last month it would cut output by some 15,000 units over the rest of 2004 due to a weak dollar and slack demand that swelled inventories, but no jobs went.

Fields said exchange rates were hitting British carmakers who export to the United States, but described this as an external factor that would vary from year to year.

"Britain is still a good place to make cars -- under the assumption that we are going to have the world-class levels of quality, cost and productivity," he told Reuters last week.

"This stuff isn't rocket science. It's hard work and that is what the team is focused on."

Ford's luxury car business is key to its goal of booking $7 billion in annual pre-tax profits by 2006. PAG and Ford's Lincoln brand are supposed to account for a third of that profit.

But PAG sank to a pretax loss of $362 million in the second quarter from a profit of $166 million a year earlier, hit by the strong euro, model changeovers and higher operating costs.
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