24 October 2012 16:11 [Source: ICIS news]
LONDON (ICIS)--Ford Motor Company on Wednesday announced plans to restructure its European operations and cut thousands of jobs in an effort to return to profitability, the company said on Wednesday.
Ford will cease vehicle production in Genk, Belgium, by the end of 2014, cutting approximately 4,300 positions. Ford will use its other European plants to produce cars it now makes in Genk.
“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 of Ford, Europe.
According to a chemicals trader, this could affect up to 10,000 people because suppliers to the plant will also have to cut staff numbers as demand from Ford falls.
Combined with cutbacks at other carmakers this year, it could significantly affect demand for chemicals in Europe, the trader said.
Earlier this year, French producer PSA Peugeot Citroen announced plans to cut 8,000 jobs and close one of its assembly plants in Aulnay, near Paris, as part of a €1bn ($.30bn) savings programme. Meanwhile, Italian automaker Fiat has sent its workers home on prolonged holidays for several weeks in July, September and October to cut output.
Mercedes, Volvo and Volkswagen have also announced plans to reduce costs in an effort to become more competitive in a tougher business environment.
Ford's announcement comes after figures released last week by the European Automobile Manufacturers' Association, which showed new car registrations fell by 10.8% in October year on year in Europe and by about 20% in total in Western Europe since 2007.
New vehicle sales in Europe have almost reached a 20-year low in 2012 and are expected to remain flat or fall further next year, Ford said.
($1 = €0.77)
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