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by David Zalstein

Ford has announced plans to close three European plants as it attempts to achieve profitable growth within its European operations, against projected losses for 2012 set to exceed US$1.5 billion ($1.45 billion).

The Ford plan involves the closure of two UK facilities next year – an assembly plant in Southampton and stamping and tooling operations in Dagenham – and a major assembly plant in Genk, Belgium, by the end of 2014.

The closures will impact 5700 currently employed workers – 4300 employees from Genk and 1400 from the two UK plants.

Ford Plant - Dagenham

Ford says the closures will reduce installed vehicle assembly capacity (excluding Russia), by 18 per cent or 355,000 units, for a gross annual saving of US$450 million ($435 million) to US$500 million ($483 million).

Ford president and CEO Alan Mulally said the aim was to mirror the success of the ‘One Ford’ scheme in North America by addressing the European crisis with a focus on new products, a stronger brand and increased cost efficiency.

“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,” Mulally said.

Ford Plant - Dagenham 2

New vehicle sales in Western Europe have reached a near 20-year low in 2012, with Ford expecting these figures to remain flat or fall further next year.

In July, Ford Europe returned a loss for the second quarter of 2012 totaling US$404 million ($390 million).

Despite recent actions including reducing line speed, short-time working days, lay-off days and a reduction of temporary employment in several plants, Ford last month announced plans to introduce 15 global vehicles in Europe within five years.

Ford isn’t the only car maker struggling in the current European financial climate, though, with both PSA Peugeot Citroen and General Motors Europe experiencing challenges of their own.




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