The future of Ford’s British van factory hung in the balance this morning after the American motor giant called a meeting with unions a day after closing its plant in Belgium.
Ford said yesterday that it was restructuring its entire European operation in response to the ongoing economic crisis, which has seen car sales plunge amid dwindling consumer confidence and spending power.
It will close a factory in the Belgian town of Genk by the end of 2014 in a move that will result in 4,500 direct job losses and 5,000 more among subcontractors, as it shifts production of the Galaxy, Mondeo and S-Max to an existing plant in Spain to cut excess capacity.
The company also scheduled a meeting today with British union leaders over the fate of the Transit van plant at Southampton, amid speculation that the firm is to announce its closure.
Transits have been built at the site since 1972, although the workforce has been halved in recent years to 500, with the factory operating on a single shift.
Ford has also promised to provide more details of its “transformation” plan for Europe today.
Stephen Odell, chairman and chief executive of Ford in Europe, will meet personally with union officials to give them the news.
He said: “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.”
Ford employs around 11,400 workers in the UK at plants also including Dagenham in Essex, Halewood on Merseyside and Bridgend in South Wales.
In September, European new car registrations shrank at the fastest pace in the past 12 months, leaving nearly all major brands nursing double-digit declines. Ford’s Genk plant has operated on a four-day week for much of 2012, with only 15 more production days planned this year.
In a recent research note, UBS said Ford’s factories had been running at just 52 per cent of their maximum output this year, and predicted that Genk would be closed. It estimated that shutting the factory would cost about $1.1 billion (£700 million) but generate annual savings of $730m.
Ford’s decision to close Genk comes after General Motors shut its Antwerp plant in 2010. The shift to Spain also echoes GM’s May decision to produce the next generation of its Astra compact in Britain after workers agreed a pay deal, leaving its plant in Germany in danger of closure.
French carmaker PSA Peugeot Citroen, which in July announced plans to cut 8,000 more jobs and close a plant near Paris, added to the gloom as it said third-quarter sales fell 3.9 per cent and unveiled plans for a goverment bail-out of its financing arm.
Europe’s second-biggest automaker said it was close to an agreement with creditor banks on €11.5bn (£9.3bn) of refinancing and had won state guarantees on €7bn in further borrowing for its Banque PSA Finance. In return it has agreed to appoint government and union board representatives, halt dividend payments and scrap stock options for its top executives.