Ford Closes Three EU Plants In A Week. Analysts Love It
As expected, Ford is closing an UK plant. Unexpectedly, Ford is closing another one right with it, bringing EU plant closings to three in two days. Ford is closing its Ford Transit plant in Southampton, and it is closing the stamping plant in Dagenham with it, says Automobilwoche [sub].
“In 2013 Ford is closing its stamping plant in Dagenham and the Transit van plant in Southampton and that could lead to the loss of a couple of thousand jobs,” said union leader Roger Maddison.
This is part of a restructuring plan to stem losses in Europe, expected to exceed $1.5 billion this year, says Reuters.
According to Ford, installed vehicle assembly capacity will be lowered by 18 percent, with related gross annual savings of $450-500 million. Thirteen percent of its European workforce will be affected by the restructuring.
Ford expects to lose $1.5 billion this year in Europe. By 2015, Ford’s Europe business is projected to be back in the blacks again.
The plans were well received by financial analysts. “With GM Europe you always wonder what’s going on – it looks like they are still bogged down in deciding what to do,” London UBS analyst Philippe Houchois told Reuters.
Analysts at Morgan Stanley believe Ford is “demonstrating the vision and industrial courage” to make tough decisions that will pay off long-term, Reuters says.
According to USA Today, Ford’s move “could break the logjam and give other automakers permission to announce similar shutdowns.”
Europe has factory capacity to build about 22 million units a year. This year, sales of 14 million are expected.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Too funny. Ford finally brings their mediocre European offerings here to the colonies, right when Europe begins to stop buying the appliances. This is the ignorance of One Ford. Such a misguided plan. It's beginning to fail before our eyes. Mulally should have been fired a long time ago
Pretty interesting, the "old Ford" used to play follow the leader with General Motors - GM spins off it's parts business, Ford spins off it's parts business; Cadillac comes out with a sporty RWD sedan, Lincoln comes out with a sporty RWD sedan; GM buys a European luxury brand, Ford buys a European luxury brand; GM announces radical North American plant closures, Ford announces radical North American plant closures etc. The old MO was for Ford to wait for GM to make a move first, see how the market reacted, then decide whether to follow suit. I take this as a real sign that Ford has left that whole timid philosophy behind and are ready to make bold moves entirely on their own initiative. They know what they have to do to get their house in order and they're not waiting around for industry consensus to get it done.
This is sad in the sense that Ford is now going to be out of the UK. I always have held an illogical nostalgia to old manufacturing sites.
"Cadillac comes out with a sporty RWD sedan, Lincoln comes out with a sporty RWD sedan" The Catera was pure junk. Just read the posts whenever Murlee shows a Catera in scrap yard.