After announcing plans to shut down its Genk factory in Belgium at the end of 2014, Ford came out today with new details about its European restructuring efforts that include the closure of two more plants, the allocation of production, the loss of up to 6,200 jobs and other actions to increase cost efficiencies.
The announcements come against the backdrop of the persisting economic crisis in Europe with Ford estimating its loses in the region for the full year 2012 to exceed $1.5 billion (€1.15 billion).
The two additional factories receiving the axe are the Southampton Transit van plant, which is Ford’s last vehicle-making facility in the United Kingdom, and its stamping and tooling operations in Dagenham, again in England.
The closure of the three facilities along with a previously announced initiative to reduce around 500 salaried and agency positions across Europe, will lead to the loss of 6,200 hourly and salaried employees, including 4,300 positions in Genk and 1,400 in the UK.
Ford said that it will likely move production of the next-generation Mondeo, S-MAX and Galaxy from Genk to its assembly plant in Valencia, Spain, adding that this will lead to a delay in the introduction of the Mondeo in Europe, as it won’t hit the market before late 2014.
Under the proposed plan, production of the C-MAX and Grand C-MAX compact minivans would move from Valencia to Saarlouis, Germany, in 2014, while manufacturing of Transit will be consolidated in Ford’s Kocaeli facility in Turkey, starting from 2013.
Other actions taken by Ford include reducing line speed, short-time working days, lay-off days and temporary employment in several plants, as well as withdrawing from FIA World Rally Championship as a factory team after the 2012 season and cutting vehicle inventory at its European dealerships.
According to the Blue Oval, the planned actions will reduce its vehicle assembly capacity in Europe, excluding Russia, by 18 per cent or 355,000 units, while the related gross annual savings will total $450 million to $500 million (€350 million to €390 million).
“Using the same One Ford plan that led to strong profitability in North America, we will address the crisis in Europe with a laser focus on new products, a stronger brand and increased cost efficiency,” said Alan Mulally, Ford president and CEO. “We recognise the impact our actions will have on many employees and their families in Europe, and we will work together with all stakeholders during this necessary transformation of our business.”
He continued: “While we are facing near-term challenges in Europe, we are fully committed to transforming our European business by moving decisively to match production to demand, improve revenue through new products and a stronger brand, improve our cost efficiencies and take advantage of opportunities to profitably grow our business.”
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