Ford to close European plants due to massive losses
Ford has recently announced plans to close three of its European plants in its effort to curb losses and even achieve profitable growth with its European operations. This is a move that simply had to be done when you consider that the projected loses for 2012 are set to go past $1.5 billion.
This Ford plan will involve the closure of two United Kingdom facilities next year – a Southampton assembly plant and a stamping and tooling operations in Dagenham – and a large assembly plant in Genk, Belgium, by the end of 2014.
The closure will reduce Ford’s installed vehicle assembly capacity by eighteen percent, and will bring about a gross annual savings of $450 million to $500 million.
The idea behind this process, according to Ford president and CEO, is to mirror the success that they had with the ‘one Ford’ scheme in North America, in order to address the European crisis with a focus on new products, a stronger brand and increased cost efficiency.
This move will impact a total of 5700 employees, 4300 from Genk and 1400 from the two British plants.
New vehicle sales in Western Europe have reached a twenty-year low this year, and Ford is expecting for the figures to either remain flat or to fall further next year. In July of 2012, the Ford Europe returned a loss for the second quarter of 2012 of $404 million.
Even though recent actions have reduced line speed, shortened working days, lay-off days and reduced the temporary employment in several plants, Ford still announced plans to introduce fifteen global vehicles in Europe in the following five years.
We should mention that Ford is not the only car maker struggling in the current European financial climate, with both PSA Peugeot Citroen and General Motors Europe going through hardships of their own.
