Ford Motor Co. pressed ahead with its plan to slash production in Europe, announcing another plant closure and 1,500 more job cuts, as it warned that annual losses in the region will exceed $1.5 billion this year and next.
Ford is struggling in Europe, like many major carmakers, because labour costs are relatively high and there are too many plants given that demand for cars is sliding due to the economic crisis. Worries about its European business have dragged down Ford's stock price this year.
A day after announcing the closure of a major plant in Belgium, Ford said it also will close its Transit van plant in Southampton, Britain, and the stamping and tooling facility at its plant in east London.
The actions announced this week - along with a previously announced initiative to cut about 500 salaried and agency positions across Europe - affect a total of 6,200 Ford jobs, or about 13 per cent of the company's European workforce.
Counting the indirect impact on suppliers that depend on doing business with Ford's factories, the plant closures will cause about 11,000 job losses.
"We recognize 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," said Ford's president and CEO, Alan Mulally.
Len McCluskey, general secretary of Britain's Unite union, said workers would fight against the closures.
Ford said it needs to cut costs in Europe, where it will try to refocus on fuel-efficient motors and safety technologies. It expects the European business to return to profitability by mid-decade.
