Ballard To Supply Honda With Fuel Cell Modules.

Ballard Power Systems has signed a supply agreement with Honda Motor Co. Under the terms of the agreement, Ballard said it will supply Honda with up to 32 Mark 902 fuel cell modules through 2005 and support services for Honda's fuel cell vehicle customer deliveries in the U.S. and Japan.

"This production supply agreement with Honda Motor Co. builds on our previous developmental supply agreement with Honda R&D Co., and confirms Honda's confidence in Ballard's fuel cell technology and our ability to meet Honda's stringent performance requirements," said Dr. Andreas Truckenbrodt, Ballard's Vice President and General Manager, Transportation Division.

"This agreement enables Honda to deliver its fleet of fuel cell vehicles, powered by Ballard, for operation by Honda's customers in real-world conditions." "This is an historic event for Honda and for Ballard," said Dennis Campbell, Ballard's President and Chief Operating Officer.

Despite the new agreement with Honda, Ballard is struggling with losses and tough equity markets to fund development of its fuel-cell technology. The company said it would cut 400 jobs over the next year, or 28 percent of its workforce, as part of a new plan to pare costs.

Announcing a revised five-year operating strategy, Ballard said it would consolidate operations and reduce its workforce to 1,000 employees, taking a charge of $15 million, of which $12 million would be in the fourth quarter.

Ballard, which develops alternative energy technologies, said DaimlerChrysler and Ford Motor had agreed to provide combined funding of $97 million until 2007. Ballard said the two auto giants had agreed to provide funding on request by Ballard at any time after Dec 31, 2003, eliminating an earlier requirement that they would give money only as part of a larger equity offering by Ballard.