Ford closure costs 4500 jobs

2012-10-25 05:54

BRUSSELS, Belgium - Ford will close a car plant in eastern Belgium — one of its main European factories — by the end of 2014, a move that will cost 4500 direct jobs and 5000 more among external contractors.

Ford, half a century after construction on the Genk plant started, told a management council meeeting that production was winding down since slumping European sales has forced a restructuring of its plants.

Christian Democrat Union representative Johan Lamers said: "This has taken us by surprise and is an extremely bitter pill."


Ford has been under pressure in Europe due to the region's slowing demand for its products and the overall slide of car sales on the Continent due to the debt crisis. The company expects to lose more than R8.7-billion in Europe by the end of 2012, where it sells 25% of its vehicles. Analysts say Ford has more factory capacity than it needs.

The plant in Genk makes the Mondeo, the S-MAX minivan and the Galaxy car. Ford said it plans to move the production of all three lines to Valencia, Spain.

Stephen Odell, CEO of Ford Europe, said: "The proposed restructuring of our European manufacturing operations is a fundamental part of our plan to strengthen Ford's business in Europe."

Figures from Acea, the European automakers' association, show European market sales fell 10.8% year-by-year in September. Ford's drop in sales was 14.9%.

Ford's European management was expected to meet with Belgian prime minister Elio Di Rupo and regional Flemish authorities.

The announcement came barely a month after Ford had given reassurances about production at the Genk plant, Lamers said. Ford Genk represents more than 30% of the car production in Belgium.

Workers lit a bonfire at the gate of the plant but there was little union action since the factory was in the middle of a three-week layoff due to poor demand.