Ford Factory Closures
(Thursday 25 October 2012)
In a year when it expects to lose more than $1.5 billion thanks to sales which have declined by 20% in the last five years and are expected to fall even further, Ford Europe has announced its intention to be back in profit by the middle of the decade.
Its plans for doing so include bringing existing vehicles such as the Mustang and the Edge (a large SUV) to the region for the first time in the hope of attracting customers who would not previously have conisdered a Ford, introducing new models such as the EcoSport (a small SUV) and making the cars for which it is already known more attractive through the use of new technologies, a category which includes inflatable rear seatbelts, active parking assistance and the increasingly widely-used EcoBoost turbo petrol engines.
But Ford also needs to build fewer cars than it does now, which means closing down production facilities and putting people out of work. The greatest impact will be felt in Belgium, where Ford's factory at Genk is scheduled for closure by the end of 2014. Production of the next-generation Mondeo and the Galaxy and S-MAX MPVs will transfer to Valencia in Spain, where the C-MAX and Grand C-MAX are built, though there are also plans for those to be manufactured at Saarlouis in Gemany instead.
And the UK isn't getting out of this unscathed. Ford has announced that it will close both its stamping and tooling facility in Dagenham and the Transit assembly plant in Southampton. This might lead to the loss of around 2000 jobs, less than half as many as Ford says will go at Genk.
The result of these closures will be a drop in production capacity of 355,000 vehicles, leading to a gross saving of perhaps as much as half a billion dollars. (These figures, both quoted by Ford, suggest that it costs rather less than £1000 to build a new car, though of course it's all a bit more complicated than that.)
It may not be much consolation for the workforce, but Ford has also announced that, for the first time in ages, it won't be competing in the World Rally Championship next year. That will certainly save money, though nothing like as much as the factory closures will.