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Ford cuts costs, but revenues lag behind target

DETROIT, (Michigan): The Fort Motor Company slashed costs by one billion dollars in 1999, but nevertheless posted disappointing earnings in Latin American and European markets, officials said.

The automaker, which will publish its fourth quarter and full-year results January 26, blamed economic difficulties in Brazil and a lack of attractive small cars for its performance in Latin America.

"Ford's product offerings in Brazil were not in step with demand," said Jim Cain, Ford's financial news manager.

Revenues in Brazil, the company's largest market in the region, were down 'hugely" from 1998, Cain said.

In Europe, the full-year results will also show that Ford missed its 1999 target on earnings growth, because of over-capacity, tough price competition and some outdated offerings.

"Ford has older models compared to some of our competitors,"Cain said. He said the number two global automaker aims to aggressively target the premium segment of the market, where profit margins are better.

Cain said engineering and manufacturing efficiencies through better integration of the company's regional operations have brought cost savings of six billion dollars since 1997.

Setting out Ford's milestones for 2000, Jac Nasser, president and Chief Executive Officer, pledged to grow overall revenues by five billion dollars, and shave another one billion dollars from costs compared to 1999.

Nasser predicted another record earnings year for the North American operation, which benefitted from record sales of 16.9 million in 1999, in a statement presenting the 2000 targets.

Nasser also announced the company would finally spin off its parts subsidiary Visteon this year, in a long-awaited move. AFP