Ford plans to close European car plant

Ford is planning to close its huge car production plant in Belgium with the loss of 4,300 of jobs at the factory plus many more in the supply chain.

The move by the world’s fifth-largest car firm is the latest indication of how the European new car market is struggling – with analysts revealing annual car sales are a full 20% lower than they were five years ago.

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Ford plans to close the Genk plant in Belgium in 2014, when the current-shape Mondeo, S-Max and Galaxy come to the end of their life. Production of these cars’ replacements will move to Spain instead, with the C-Max models that are currently made there switching to a Ford plant in Germany.

The firm hopes this will help make better use of its factories and cut ‘overcapacity’ – car companies lose money when factories are not running at peak capacity, but if the buyers are not there, they have no choice.

It is suggested Ford’s European plants are running at little more than half what they were built for.

Ford is thus equipping itself with the capacity to make fewer cars overall in Europe, but hopefully thus eventually making more money on each one sold.

The plans are currently in the consultation stage. However, said Ford, they would help address manufacturing overcapacity and are thus likely to go ahead.

‘New vehicle sales in the region have reached a nearly 20-year low this year and are expected to remain flat or fall further next year,’ said a statement.

“The proposed restructuring of our European manufacturing operations is a fundamental part of our plan to strengthen Ford’s business in Europe and to return to profitable growth,” added Stephen Odell, chairman and CEO, Ford of Europe.

He did add that Ford understood the impact this will have on workers in Genk. “We fully recognise and accept our social responsibilities in this difficult situation and, if the restructuring plan is confirmed, we will ensure that we put in place measures and support to lessen the impact for all employees affected.”

Ford President and CEO Mulally will reveal more details on the transformation plan during a media conference call on the American brand’s ‘European transformation plan’ tomorrow.

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