Ford gets a new problem to solve

THE Ford Motor Company is not having a good time at the moment. Jaguar Racing's parent company has just announced an eye-watering loss for the last quarter of 2001 and is planning to slash 35,000 jobs in order to become more effective.

Now a court in California has ruled that the company's Explorer model was defective and that it was not simply Firestone tires which were to blame in a series of accidents in 1997-2000.

This opens the way for a number of lawsuits. The ruling will be followed by the awarding of damages and Ford accountants will be quivering in their boots at the thought of what may happen next. Ford can of course appeal against damages and in many cases such disputes are settled out of court but it is still possible that the new ruling could cost Ford many millions of dollars if other law suits are filed against it.

Around 200 people were killed in accidents involving Explorers and Firestone tires. Ford has always said that the problems were caused by the tires while Firestone has argued that it is Ford's fault.

Despite constant claims that the hugely unsuccessful F1 program will not suffer in the Ford cutbacks, there is speculation that if this season does not produce some results Jaguar will be told to fund the program itself. Ford is believed to have pumped in as much as $100m - in addition to the costs of developing the Cosworth V10 engine.

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