According to lore, it is impossible to close a factory in Europe. Not true. It’s just outrageously expensive. One company that found out is Ford. The carmaker allocated nearly $200,000 per hourly worker of its soon to be closed Genk plant in Belgium.
Ford expects to pay about $750 million in severance to hourly workers when it will close its factory in Genk, Belgium, by the end of 2014, says Reuters after reading regulatory filings.
The plant employs about 4,000 hourly workers and 300 salaried employees. Negotiations with salaried workers at the plant are still under way.
In most European jurisdictions, workers have a job for life after an initial probationary period. This does not mean you can’t fire them. If you do, they are entitled to a hefty severance, decided by a court, or in negotiations with the unions. Average severance payments of $200,000 and higher are normal, depending on the age of the workforce.