Low European sales has led Ford Motor Company to announce Wednesday a proposal to restructure its Europe manufacturing operations as part of its comprehensive plan to respond to structural market changes and deliver profitable growth in the region.
Ford announced its plans to end production at a major production plant in Genk, Belgium, by the end of 2014, pending the outcome of a consultation process with employee representatives. Ford Genk represents more than 30% of the car production in Belgium
If the plan is confirmed, Ford said it would resource several vehicles to more fully utilize its European plants.
The plan would help to address manufacturing overcapacity stemming from a more than 20 percent drop in total industry vehicle demand in Western Europe since 2007. 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. It’s been reported that Ford expects to lose more than £800,000 million this year in Europe.
“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,” said Stephen Odell, chairman and CEO, Ford of Europe.
“We understand the impact this potential action would have on our work force in Genk, their families, our suppliers and the local communities. We fully recognize 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,” Odell said.
Ford said it has initiated an information and consultation process with representatives of employees regarding the company’s intention to close Ford’s underutilized Genk Plant and cease vehicle production by the end of 2014 with the reduction of approximately 4,300 positions
If the proposed plan is confirmed, production of the next-generation Mondeo, S-MAX and Galaxy could move to Ford’s assembly plant in Valencia, Spain
Pending further study, production of the C-MAX and Grand C-MAX compact multi-purpose vehicles could move from Valencia to Saarlouis, Germany, in 2014 under the proposed plan.