The economic crisis that is currently raging in Europe is not likely to subside any time soon. As a result, automakers have started taking measures in order to account for reduced demand of their products.
Ford, for one, will temporarily lay off 4,000 of its 6,200 workers at its Valencia plant in Spain for 39 days over the course of 2012, according to Adrian Schmitz, a spokesman for the Blue Oval’s company’s European operations in Cologne, Germany.
“This downtime is related to product changeover at the plant and the expectation that demand will remain weak next year across the European industry”, said Schmitz. “The decline in demand for both Spain and Europe is affecting all of the industry,” he added.
According to Spanish news site El Economista, Ford’s move will reduce production of the facility, which will cease making the Fiesta and start manufacturing the new Kuga (Escape in the U.S.) and Transit Connect van at the end of 2012, by 34%.
Analysts like Bankhaus Metzler’s Juergen Pieper believe that the situation will only get worse. “It is certainly a sign of frail demand. It’s only likely to get worse. More manufacturers will see sales worsen next year and this will lead to more job cuts.”
Pieper added that Ford is in better shape than most rivals are to deal with the reduced demand expected in 2012, since despite overall European sales dropping 1.4% in October, it recorded a 6.4% increase compared to October 2010. However, the Blue Oval’s sales in Spain declined by 6.7% in the same month.
PSA Peugeot Citroen has already said that it would cut as many as 3,500 permanent work positions, and both Renault and GM have announced that they will temporarily suspend some production lines in their French and Spanish plants respectively.
Story References: Bloomberg
