Ford of Europe chairman Lewis Booth believes recent restructuring efforts will spare Ford the turmoil facing archrival General Motors Europe, according to Automotive News Europe.
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Last month, GM endured wildcat strikes at its Bochum, Germany, plant after announcing plans to lay off 12,000 workers in a €500 million restructuring plan. GM announced the plan in an effort to stem losses in Europe.
Ford of Europe will probably lose money in 2004, but less than the $US1.1 billion (€864 million) it lost in 2003.
“We have done a huge amount of restructuring,” Booth said in an interview. “We’re running nearly 100% of our manned capacity.”
Since 2000, Ford has closed its Dagenham, England, car assembly plant and converted it to a diesel engine-manufacturing centre. It transferred production of the Transit light commercial vehicle from Genk, Belgium, to the Kocaeli plant in Turkey, laying off 2,880 Genk workers. The company also closed smaller plants in Azambuja, Portugal, and Plonsk, Poland.
In January Ford reached agreement with workers in Germany. Ford reduced its hourly and salaried workforce by 1,250 using early retirement and voluntary layoff packages.
But Max Warburton, executive director of global investment research at Goldman Sachs in London, doesn’t believe Ford is out of danger in Europe.
“There are a couple of challenges for Ford in Europe,” he said. “They are still making a small car [the Fiesta] in Germany, and it’s hard to see how anyone can make money building a small car in Germany.
Warburton also noted Ford and its subsidiary brands operate five product development centres in Europe: Dunton, England, and Merkenich, Germany (Ford of Europe); Gaydon, England (Land Rover and Aston Martin); Whitley, England (Jaguar); and Gothenburg, Sweden (Volvo).
“There are a lot of people flying around Europe on 737s,” he said. “I wouldn’t be surprised if they took some tough decisions on the product development side. They’re still bleeding cash. Ford still has a lot of hard work ahead of it.”
