Belgian employer and technology body, Agoria, is estimating today’s (24 October) news from Ford it is to shutter its Genk plant could cost a possible 9,500 jobs, will slash the country’s GDP by 0.3% and affect 40 suppliers.
The announcement – widely feared by trade unions – has sent shock waves through Belgium which also underwent the complete closure of General Motors’ Antwerp factory almost two years ago.
Agoria says as well as 4,300 staff directly employed by Ford at Genk, a further 1,305 along the ‘conveyor,’ exclusively supply the automaker, while another 3,885 are what it terms “on the line” industrial suppliers and service providers.
“The closure of Ford’s Genk plant comes as a severe blow, both for Belgium’s automotive sector and for the Belgian economy,” said an Agoria statement sent to just-auto from Brussels. “Belgium’s competitive standing has not fundamentally changed since the closure at Opel.
“Ford Genk is now falling victim to a combination of overcapacity in a crisis-ridden sector and competition from factories sited in other countries.”
Agoria adds the Limburg province will bear the main brunt of the closure. Ford Genk is its largest private sector employer and Agoria fears, in addition to the direct job losses, there will be a heavy price to pay among suppliers as well.
The employer body says companies established along the conveyor around the factory are linked exclusively to Ford Genk and employ 1,305 people, while a further 40 or so companies work as suppliers to the plant.
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Some of these, says Agoria, work exclusively for Ford Genk, others also supply other Ford plants throughout Europe, while a number of others have an international customer portfolio and will be better able to offset the loss.
Ford Genk’s closure will also hit the Belgian economy very hard says Agoria, noting the automaker has sales totalling EUR3bn (US$3.8bn) and accounts for 15% of the value added generated by the country’s automotive sector.
Shuttering will also have the devastating effect of shaving 0.3% from Belgium’s GDP.
“Agoria points to the unfortunate coincidence of the end of the model cycle at Ford Genk and the gloomy economic situation, which exacerbated the problem of over-capacity in the car sector,” said the association’s statement. “Belgium’s wage costs, local taxes and high energy costs make us one of the more expensive manufacturing countries.
“And whereas the federal shift work bonus is pumping fresh life into the automotive sector industry, making car assembly slightly cheaper here than it is in Germany, that advantage is melting away fast because of high inflation and more rapidly rising wages, thanks to indexing.
“Accordingly, Agoria is calling for lower structural costs, so that Ford Genk does not end up being a sad entry in an ever longer list of departing companies.”