Most of the layoffs will be at the No. 2 US automaker's Sao Bernardo assembly plant near Sao Paolo in southern Brazil that employs about 5,000 people. Workers at the plant, which makes Fiesta and Ka cars and a Fiesta-based pickup truck, have been on paid leave of absence.

``Since the third quarter of 1997, the overall market in Brazil is down about 40 per cent and we have take a number of steps to respond,'' Ford spokesman Jim Cain said.

``There's not much likelihood that things will improve in 1999.''The laid off workers will receive a severance package of two-and-a-half months salary, as well as other required payments, Cain said. While he declined to estimate the total charge for the layoffs, Cain said Ford previously stated it will take charges in the fourth quarter to coveremployee separation programmes.Upon the workers return, the Sao Bernardo plant will build cars over one shift as opposed to the normal two, he said.

In addition to the Sao Bernardo plant, Ford has a chassis plant and an engine plant in Taubata, Brazil. Plans for the company's $700 million assembly plant under construction in the state of Rio Grande do Sul have not been affected.