By on September 14, 2012

Union leaders met with Ford officials last week during Ford’s Amsterdam extravaganza, and when the topic of closing the Genk, Belgium plant was raised…nothing was said.

Genk, which employs 4,000 workers and builds the Mondeo and S-Max minivan, is looking like the next victim of European overcapacity.

With the new Mondeo now a world car, the door is open for alternate assembly locations – such as the United States or Mexico. The car has already been delayed by six months. Supplies and workers are getting nervous. Speaking to Reuters, union chief Luc Prenen said

“We asked about the rumours (of plant closure)…They said they could neither confirm nor deny them.”

Ford officials were equally evasive, stating that “…It’s too soon to provide any specifics about our plan for Europe.” But with European car sales at their worst in nearly two decades, and Ford bleeding money in Europe, it wouldn’t surprise anyone to find out that Ford packed up and left Genk.

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3 Comments on “Ford Still Mum Regarding Genk Plant Closure...”


  • avatar
    el scotto

    Is there any reason to keep Genk open? Is it an ISO whatever center of excellence, or will exporting Mondeos and S-Max’s make the accountants happy, or that they’re pretty good at what they do keep the lights on? How hard would the logistics chain be to create if they went to the US or Mexico? Is there capacity in the US or Mexico? Lots of questions and no firm answers, yet.

  • avatar
    Bela Barenyi

    I’m wondering why car companies don’t try to find something that a plant, whose capacity is not needed, can produce instead of cars.
    And I don’t mean car parts anything related to cars, but something completly different.

    Let’s take this Ford plant in Genk. I know this sounds crazy, but
    why doesn’t Ford transform this plant into a chocolate/or food
    factory? I mean, Belgium is known for its chocolate and sweets.

    Here’s how to do it:
    1.Create a new legal entity, for instance “Genk Chocolate S.A.” Provide this new entity with equity capital, let’s say 100 million Euros
    2.Sell the Genk factory for a symbolic price of 1 Euro to the new created “Genk Chocolate S.A.”
    3.Hire qualified people with “Fast Moving Consumer Goods” (FMCG) experience, for instance people from Unilever, offer a big
    paycheck and a once in a lifetime chance to create a new a brand
    and company. Especially a good CEO with FMCG experience and marketing staff and sales & distribution staff, also with profound
    experience in the FMCG industry. Oh, and don’t forget to hire people who know one or two things about industrial chocolate manufacturing.
    4.In order to kick start the business, focus on standard chocolate products, create a product portfolio, buy production lines, train the workforce, and most importantly find customers. The sales & distribution team has to succeed in getting the products listed at big discount supermarket chains like Aldi and Lidl. The best way to achieve this is to create so called “trade brands” for these discount supermarket chains. The profit margin of contract manufacturing for a supermarket’s trade brand is low, but it helps to start the business and to make business connections for future products. Furthermore, it helps to acquire experience in chocolate manufacturing. The unique selling proposition for your products: Affordable original delicious Belgian chocolate!
    5.Create a new upscale brand and new and unique chocolate products.
    6.In order to reduce the dependancy on supermarket chains open your own chocolate stores. Open the first stores just in the bigger cities in Europe, like Brussel, Amsterdam, London, Paris, Copenhagen, Stockholm, Zurich etc. Germany is a big market and has several big cities. So it’s important to open shops in Hamburg, Berlin, Cologne, Munich, Frankfurt etc. Oh, duty-free shops are also good to sell your products, so try to open shops at big airports or at least get your products listed in duty-free shops.
    Of course the products should also be available through your own online-shop. Don’t forget to enter important markets/regions like, North America & South America and Asia, especially China and India (=lots of people, growing middle-class and with increasing income comes an increase of demand for luxury products).
    7.Expand the product portfolio, e.g. biscuits, waffles, chocolate spreads, fine jams, coffee, teas etc.
    8.Look for possible takeover opportunities in the industry
    9.Build a “chocolate museum” nearby the factory and lure/attract tourists. It should include a “chocolate school”, where you can take part in classes and courses which show how to create and make your own chocolate creations or how to cook with chocolate.
    10. When the “Genk chocolate S.A.” reaches a turnover of 1 billion Euro or even more, sell it off to someone else (e.g. private equity or another chocolate or food company) or make an IPO/list the company on the stock exchange.

    Even Fiat could do this with one of its underutilized plants in southern Italy:
    1.Create the “Fratelli Agnelli Spa.” Provide this new entity with equity capital, let’s say 100 million Euros
    2.Sell the factory for a symbolic price of 1 Euro to the new created “Fratelli Agnelli Spa”
    3.Proceed like in the Genk case above, but instead of just chocolate produce traditional Italian food, e.g. pasta (Spaghetti and all that stuff), ready-made pasta sauces, frozen Pizza, olive oil, of course coffee, alcoholic beverages, cheese, cakes, cookies and chocolate specialities, icecream and many more Italian specialities products.
    4 When the “Fratelli Agnelli Spa.” reaches a turnover of 1 billion Euro or even more, sell it off to someone else (e.g. private equity or another food company) or make an IPO/list the company on the stock exchange.

    • 0 avatar
      mcs

      “I’m wondering why car companies don’t try to find something that a plant, whose capacity is not needed, can produce instead of cars.”

      If you’ve ever spent a lot of time in an auto plant, you’d never want to touch a food product produced in one. The older plants are full of carcinogens and have had problems with rodent and insect infestations. They’re also too large. I can’t think of any sort of food that would need that much space for processing. Same with other items like consumer electronics.

      The other problem is that automation has made enough progress that manufacturers like Canon Camera are very close to having plants that don’t require humans. If you can build a camera without humans, chocolate and other foods could be easily made without people as well.

      In the Boston area, we’ve successfully recycled one Ford auto plant and are continuing to try to recycle another. The first is the Model T Assembly plant on Memorial Drive in Cambridge. They are renovating it into a Biotechnology Laboratory facility. The other plant, the Somerville Asseembly Plant, is in the midst of a second (that I know of) attempt to recycle it into a retail complex.


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