By on March 19, 2013

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.

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60 Comments on “Breaking Up Is Expensive To Do, Ford Finds Out...”


  • avatar
    lowsodium

    And once that factory closes its not coming back. Ford wont forget the insane amount of money it had to pay to lay people off.

  • avatar
    raph

    Pretty sure Ford knew what is they were getting in to at Genk, however going forward at some point they will be money ahead rather than letting the plant loaf along at anunproductive rate

  • avatar
    JimothyLite

    In my book, Disneyland has just become the Second Happiest Place on Earth.

    • 0 avatar
      tresmonos

      Those slap happy workers with Mickey Mouse ears better save their severance for their kids and grandkids.

      • 0 avatar
        sportyaccordy

        They dont need to do that either. The state will cover much of their retirement needs, with generous inflation adjustments.

        Remember, these folks are probably paying taxes to the order of 50%, along with VAT and all that garbage. Too much.

  • avatar
    jarretnoir

    I am sure that They (Ford) made a goog buck over the years in Belgium.Ford closed St Thomas assy in Canada and in 1998(Worked there for 35 years) that plant got one of the highest award in North America.Means nothing if you assemble an old product (Crown Vic).The bottom line is,if there is somebody somewhere or a country somewhere regardless of an union or a product,tv,Ipod,I pad, fridge,wash machine etc the global world will brainwash you into giving in to the lowest standard of living.In the meantime be lucky that a civilized country somewhere does not give in to shareholders greed.Take the money and run and keep voting to whoever will stand up to the minimum social fabric of a civilised sociaty.

    • 0 avatar
      CJinSD

      What is going to pay for your entitled lifestyle when nobody is producing anything? Where will your handouts come from? What will they buy? Reality is still reality, no matter what liars you elect to delude you.

      • 0 avatar
        danio3834

        I agree with CJ on this one. Once the anti-capitalist mindset has fully consumed or driven out all the producers in our countries, there will be no one left to be forced at gunpoint to support your social “fabric”.

        • 0 avatar
          amca

          Don’t worry. For demographic reasons, in 20 or 30 years, Belgium won’t be the Belgium we know today. This will all have been about yesterday’s Belgians – the old social fabric.

          • 0 avatar
            Summicron

            @amca
            Well, we’re all in the same room with the same elephant. And we’ve all had 60+ years of social indoctrination telling us that it’s a crime and a sin to favor our own kind.

          • 0 avatar
            Yeah_right

            Heck. It won’t take 20 years. Sleepy Belgium will come apart at the seams with ethnic strife between the Dutch and French speaking sections of the country.

    • 0 avatar
      tresmonos

      Learn about globalization, then come to the realization that you aren’t special.
      In the mean time, I will keep moving production to other markets so my future kids can grow up to be worldly and educated. Maybe they’ll launch some product in your neighborhood when it turns into an economically depressed hell hole.
      Of course this is dependant on the fact that your offspring will have to break their parenting and come to this self realization themselves.

  • avatar
    1998redwagon

    how does this compare to US or canadian plant closures? i assume from the tenor of the article it is much higher but how about a quicky comparison.

    • 0 avatar
      John B

      Redwagon:

      This from the recent plant closure by caterpillar in London, Ontario:

      “Workers voted 95 per cent in favour of the severance package, which provides three weeks of pay for each year served. Labour laws stipulate workers with less than five years of experience aren’t required to receive severance, while those with more than five years on the job get one week’s pay for each year served to a maximum of 26 weeks.”

      “Though the severance package is above the required minimum “nobody is walking out of here celebrating,” CAW national president Ken Lewenza said Thursday at a news conference at the Marconi Club in London’s east end. “People are now walking out of here with a soft transition to job loss.”

      http://m.theglobeandmail.com/report-on-business/economy/manufacturing/electro-motive-workers-ratify-closeout-deal/article548573/?service=mobile

      • 0 avatar
        danio3834

        The interesting part about the CAT plant closure was the workers were given a chance to save their jobs by taking a pay cut. They rejected the pay cut, so the plant closed and they make nothing now.

        I suppose riding out employment insurance, then taking full perpetual advantage of the “second career” welfare programs is more appealing than going to work.

        • 0 avatar
          400 N

          You make it sound like they were going lose a few nickels. The reality is that it was a 50% pay cut.

          If your were in the same position, I bet you’d vote no. I know I would.

  • avatar
    sportyaccordy

    Europe is not coming back. $750M is big money- their profit last year was only $5.7B after taxes- but you have to figure, keeping the plant idle will probably cost them half of that for a year. They are gonna have to close the plant no matter what, they just have to eat it.

  • avatar
    Xeranar

    Ah the argument that Europe will never recover comes out again…sounds like sour grapes. Europe could easily recover if the EU would stop trying to austere their way out of the problem. That is of course besides the point. Welcome to a modern industrialized nation that puts its citizens ahead of corporations. The world is getting smaller Ford, cheap near-slave labor won’t last forever….if anything it will end in my lifetime.

    • 0 avatar
      BrianL

      If only you understood economics. Austerity isn’t the problem. The problem was gov’t growth and spending in the EU that it couldn’t pay for. Now that there is a recession, and even less coming in, the gov’t are trying to decide how not to default.

      Ford is also closing plants because the EU market isn’t growing. The market is shrinking. They aren’t expected to reach 2007 numbers till 2018 by some estimates. There is and has been an over capacity problem there. Should Ford just keep these plants open at a loss?

      Besides, it isn’t like people who assemble cars for Ford are doing it at near-slave labor costs. They make very good money doing so. The EU is in a big downward spiral. I thought that the EU would collapse for policy reasons, but now I think it will collapse from economic reasons.

      • 0 avatar
        NeinNeinNein

        Sorry Son, its you who dont get economics. Name one country that is using austerity to bring their economy back—name on in Europe. Thought so. Countries like the US that havent made cuts are doing much better.
        Time to reread your old econ text–or go buy one for the first time and read it.
        Example–do a bit of research–Spain for instance–low debt to GDP ratios—it was the big slowdown that screwed them–and then austerity was the double whammy.

        • 0 avatar
          CrapBox

          Switzerland has thrived with a free market economy and relatively low social welfare costs. It’s also much more democratic than more European states, as its citizens are free to put constitutional amendments to a national vote. Perhaps this “direct” form of governance plays a role in the Swiss being careful with their money and not attempting to borrow their way to prosperity.

          Outside Europe, many countries are adhering to the principles of supply-side economics. Taiwan is the most spectacularly successful example.

          • 0 avatar
            Big Al from Oz

            @CrapBox
            The Swiss don’t use the Euro. They have their own currency. Yes they do work within the Eurozone framework.

            The Germans are fairing better because after re-unification the Germans started to liberalise and free up their economy.

            Don’t confuse levels of taxations with economic freedom.

            From an economic freedom perspective the US is almost as bad as some Scandanavian countries.

          • 0 avatar
            CrapBox

            NeinNeinNein asked for an example of a European country that isn’t profligate and I provided one. I didn’t refer to the currency or tax rates.

            I simply don’t agree that spending borrowed money is the route to prosperity. You’ll note that nations that are under threat of invasion such as South Korea and Taiwan do not resort to overspending yet manage to do well economically.

        • 0 avatar
          danio3834

          The Keynesians have arrived. That economic model is short lived as we will all soon find out.

          It doesn’t work in your average household, and it won’t work for your average nation. Eventually, all your debts come back to you. Even the debts that are disguised as bad investments.

        • 0 avatar
          Type57SC

          Canada. started getting fiscally prudent in the 90s and continued in 2000s. helped in large measure by a commodity tailwind of course. But you would have to admit that having their house in order when the recession came gave them a strong hand and allowed the country to suffer less than if they had been in deficit lockstep with the US.

    • 0 avatar
      sportyaccordy

      More like, welcome to a continent where the govt puts benefits and perks ahead of solvency, investment and private employment. There’s a healthy balance between employers and employees, and Europe’s self destruction shows what happens when you tip the scale to far to the employee side.

      • 0 avatar
        mike978

        Let’s not over-egg this. Germany has fairly low unemployment and it is running only a small deficit. Some parts of Europe are in trouble but not all.

        • 0 avatar
          Hummer

          Yes but the majority are, and all having the same currency when one gets bad it equally affects the others

        • 0 avatar
          Yeah_right

          Or under-egg it, either. Germany is a generally more balanced place to own a factory. The Netherlands is somewhat more tilted in favor of employees, and Belgium (because it’s half French) is half crazy. France, Italy, and Spain are a giant tar pit.

    • 0 avatar
      Big Al from Oz

      To the guys advocating no austerity, how foolish. No one is using austerity yet. Cuts made in Europe, where?

      Most Eurozone countries are still borrowing more than they are collecting in taxation. That isn’t austeristy. The US is still borrowing to improve its economy. That appears to be a great model, borrowing out of debt.

      Once people realise they need to make much larger cuts in their standards of living to sooner things will get better. But, no government is prepared to take the necessary steps, until forced. Then the pain will be worse.

      Within 2-3 years the bubble will burst again, but this time much worse. Quantitative easing? All of this “money” that doesn’t exist.

      It seems the “West” will go kicking and screaming all the way to living within its means. We have to make room for the newer upcoming economies. We can’t compete, just look at the overall auto industry and just look at this article.

      Ford would have known what it got itself into, just like buying an insurance policy, read the fine print.

      • 0 avatar
        european

        +100

        I wholeheartedly agree. The “west” acts like a spoiled kid crying out loud for not “winning” everytime. Get over yourselves. You are not special. Why should some Opel/PSA worker be paid 2,000 euros for turning a screw while an Algerian/Chinese/Indian worker gets paid only a tenth of that amount. FOR THE SAME AMOUNT OF WORK?!?!

        Ah, hell no!! Things will change whether you like it or not. Don’t want a 5% paycut? Well, how about 100% cut when Opel bankrupts??? How about that m#.%^@#er!

        … Now you are angry. You want to protest, throw stones through shop windows? Or invade some country to take back “what is yours”? Or… or.. hey lets do the thing Breivik did. Suuuuuuuuure!

        FOAD! F#$king p@$%^s.

        EDIT: to comply with TTAC rules:

        this rant is not directed at any TTAC commenter but rather “Westerners” (where I belong as well) in general

        • 0 avatar

          ========================================
          WARNING
          ========================================
          @European:

          TTAC’s rules forbid rude posts. You don’t comply by obfuscation. If I can read “Fucking”, then “Fucking” it is, no matter the typing skills. We don’t ban words. We ban bad manners.

          Consider yourself on extremely tight probation. If one is not able to post without puerile outbursts, then commenting on YouTube might be a better use of bandwidth.

          • 0 avatar
            28-Cars-Later

            I was re-reading the FAQ, specifically:

            No foul language, no threats. We are no shrinking violets. If a TTAC moderator gets upset about foul language, probably everybody else will. The decision of what is foul or threatening rests with TTAC moderators, and their decision is final.

            Perhaps it would be helpful to give examples of obfuscation such as what European wrote and clarify this and things like it fall under the foul language rule?

        • 0 avatar
          28-Cars-Later

          @european

          Also in the West and I agree with you, we’ve been pounded into our heads how great the West was from the time of childhood and now its all crumbling because of extreme mismanagement and poor planning. We as a Western society fail to understand the chess-like nature of geopolitics, and simply cannot accept the fact fiat dollars, legacy monopolies (ie Petrodollar trade), and the threat of nuclear weapons cannot be a culture’s only bargaining pieces in a multipolar world. Heck the DPRK has nuclear weapons!

          I can’t quite understand, condone, or justify Breivik’s actions but it looked more like a semi-professional hit IMO than the random acts of a madman. I have read there is some circumstantial evidence he had help, possibly from Belarusian intelligence (which incidentally is still called KGB). What Lukashenko or Putin have to gain be destabilizing the future Norwegian political structure has yet to be seen… unless later they plan on a launching a FARC-style Communist insurgency and eventually take control of a country with rich offshore oil deposits.

    • 0 avatar
      Xeranar

      The right wing austerians came out and I expected this. The issue is every economist has described the current plans of europe as austere and has driven them back into recession. This is an internet forum and thus my economics lesson would fall on deaf ears. But suffice to say: just because YOU refuse to call it austerity doesn’t mean it isn’t.

      Deficit spending is a perfectly acceptable idea. If I were in the hole and could borrow money at .25% interest I would simply because I would be stupid not to. We have a short term debt problem in the US we could resolve by raising taxes. Europe has a bigger issue of their currency is tied together without their economies being so. The euro is the equivalent of a gold standard that hurts the weaker players and rewards the stronger. The issue on top of that is that the EU leaders are acting on their nation’s behalf first which you can’t do in a unified economic system.

      As for the near slave labor comment, the auto industry is great at hiding those bits. Auto assembly even in China I understand is fairly well paid, atleast by chinese standards, it’s the OEM suppliers and sub-contractors that use these cut rate places. Yes, Europe is shrinking but all these countries are chasing lower labor costs even if the transit costs offset the savings as some studies are showing. They’ve become institutionalized to chase these benefits even at a loss for themselves.

      But I digress..

      • 0 avatar
        geeber

        Apparently, those economists need to do more research.

        The United Kingdom has cut spending? Not if we use conventional math to measure spending over time. Here is what one magazine had to say about what has really happened in that country:

        “According to the British government’s own budget from 2011-2012 to 2016-2017 public sector expenditure will increase from £647.3 billion to £708.6 billion. It is only thanks to inflation that the public sector will see a growth rate of less than -1 percent. These are hardly the “savage cuts” that the left in the UK keep referring to, which is a shame considering that the leader of the Liberal Democrats, Nick Clegg, realized that such measures would be needed in 2009. When entering government the Tory-led coalition ring fenced the NHS and international aid from cuts, hardly a policy decision that could be attributed to fans of austerity. If you look at a visual representation of the Britsh budget it is immediately apparent that any proponents of austerity would target the NHS and welfare spending.

        “Indeed the size of the government as a percent of the economy has increased in comparison to Labour governments. As Ruth Porter, also of the IEA, explained, public spending in the UK is 47 percent of GDP. At the beginning of Tony Blair’s premiership public spending was 38 percent of GDP. If the British government wants to really practice ‘austerity’ the least it could do is aim for spending to be lower than it was at the dawn of a socialist government.”

        Meanwhile, taxes in the United Kingdom have still increased.

        When a country did actually reduce spending – which is what happened between 2009-2011 in Greece, Italy, and Spain – the cuts were actually small compared to the size of their budgets, or merely pared back total government spending to the levels of a year or two earlier. They were hardly draconian.

        While Italy reduced spending between 2009-2010, for example, it also increased spending in the following year by an amount larger than the previous reduction. Most importantly, meaningful structural reforms were seldom implemented.

        Spain’s “austerity” budget has basically reduced spending back to…a higher level than it was in 2008.

        One European country has, in fact, adopted true “austerity” measures. Estonia reduced public-sector wages, raised the retirement age to 65, and made other serious spending reforms, while maintaining its income tax rate at the same level. Since 2008, Estonia’s economy has nearly bounced back to a pre-recession level, growing 7.6 percent – five times greater than the Eurozone average.

        I’m also amused at the idea that “austerity” has caused Europe’s problems. These countries were in trouble BEFORE 2010-12. That is why there is even talk of the need for austerity policies in the first place.

        European countries greatly INCREASED spending in the years leading up to 2008. Yet their economies still were hurt by the recesssion. High levels of spending and years of spending increases weren’t sufficient to prevent a recession.

        As for raising taxes in the United States – that will only cut the deficit if we raise taxes on everyone, including the 47 percent who pay no federal income taxes. The rich already pay the lion’s share of federal income taxes:

        “Well, yes, federal revenues have averaged only 15.3% of GDP over the past four years, the lowest share in 60 years. But that did not happen because tax rates are too low. Federal revenues are down because economic growth is too slow.

        “This simple distinction is profoundly important. Even small economic changes are powerful enough to dwarf the tax-policy differences dividing Republicans and Democrats. …

        “A more progressive tax code now leverages the negative impact of slow economic growth. The share of all individual income taxes paid by the top 1% has risen to 41.8% in 2008 from 17.4% in 1980—but almost two-thirds of the income from the top 1% comes from nonwage income, including capital gains, dividends and proprietor’s profits. …

        “The country’s fiscal condition thus poses a choice for Democrats. They can harvest a great deal of revenue by making peace with a profitable and growing economy and with those productive individuals who create such an economy. Or they can embrace new taxes on both upper- and middle-income earners that will restrain economic growth. The latter course will make it harder and harder to raise the revenue that Democrats demand to fund the government they love.”

        • 0 avatar
          corntrollio

          I have no idea where you’re quoting from. A lot of what you said regarding European budgets is true (although you probably need to adjust spending amounts for population growth), but this point on the US jumped out as a little misleading:

          “The share of all individual income taxes paid by the top 1% has risen to 41.8% in 2008 from 17.4% in 1980—but almost two-thirds of the income from the top 1% comes from nonwage income, including capital gains, dividends and proprietor’s profits. …”

          The top 1% also have 35.4% of net worth as of 2010, and 42.1% of non-home financial wealth as of 2010. So it’s not that weird that the share of income taxes would be similar.

          www2 dot ucsc dot edu/whorulesamerica/power/wealth dot html

          The “productive individuals” stuff is just non-sense though — trickle-down growth has never really materialized in the way stated — the correlation is a joke. A lot of the people who would write the stuff you did would say that Reagan was great for the economy, and one of the big linchpins of Reagan’s tax plan was that capital gains should be taxed the same as income so we aren’t favoring investment over labor. Funny how that’s against the orthodoxy now.

        • 0 avatar
          geeber

          Many European countries are barely growing in population, and some are actually experiencing population loss. Population growth is hardly driving spending in those countries. Italy and Germany, for example, are starting to decline in population, as is Greece.

          The federal income tax is on INCOME. Net worth is a meaningless figure in that regard. Even if you raise the income tax rates, it won’t necessarily affect their wealth. You are comparing apples to oranges.

          The bottom line is that the top earners pay the lion’s share of federal income taxes. The idea that they aren’t already paying their “fair share” is a myth, or promoted by someone really bad at math.

          And your proof that the “productive individuals stuff is nonsense” is found where? Who, exactly, provides money for investment? People on welfare? Or are you going to try and pass off government spending on things like Medicaid and education as “investment”, as a constant stream of people in my office try to do…

          If that were the case, Pennsylvania and other states would be booming, as spending on education increased far beyond the rate of inflation up until 2008 in almost every state in the union.

          The problem is that people don’t know when to stop. Yes, SOME government spending, and even debt, can be useful in the long term. But there comes a point where a line is crossed, and we crossed that line decades ago.

          To use an analogy, a family of four with an annual income of $60,000 can boost their productivity, and perhaps their personal happiness, by borrowing some money to buy, say, a brand-new Honda Civic or Chevrolet Cruze.

          But when they start borrowing money to buy a brand-new, loaded BMW 3-Series every three years, they are in trouble.

      • 0 avatar
        danio3834

        “We have a short term debt problem in the US we could resolve by raising taxes.”

        Really, short term? 16.5T and rising by the second. There is literally no way this debt problem could be resolved in any amount of time that anyone would consider short term without massive gashing spending cuts. This isn’t even worth debating anymore.

        • 0 avatar
          Big Al from Oz

          Short term debt problem.

          The US economy can’t improve enough to cover the cost of your debt.

          You are no wheres near break even between outgoings and incomings by your government.

          The amount of money to be used to pay back the debt would destroy your economy and your average “real” wage would be 25% of what it is now to pay it back in even a 20 year period.

          You can only hope to pay interest and inflate the debt down over many generations.

  • avatar
    Hummer

    Wow what a sad ass statement to make you honestly believe everyone is entitled to a high paying job? What’s the point in continuing education if some drop out gets paid as much as you?

    You act like the EU is causing the problem, no the EU is the problem, mutually assured destruction of every nation under the same currency but different policies will be the inevitable collapse and it’s definitely not a secret.

    Edit to xerano

  • avatar
    Hummer

    Good, hopefully they will move to a more appreciative country that wants its workers to have jobs.

    Unbelievable people think their entitled to a job, Europe may go back to artificially looking well but they won’t have any global power as long as the countries within keep dumb policies such as this, 200k? Get real I’d rather go to a 3rd world country with appreciative workers.

    • 0 avatar
      mike978

      Bertel is right that it can be expensive to close a factory in Europe. But again not all countries in Europe are the same. Ford is closing factories in the UK and it is not costing them $200K per person. UK redundancy rules are not that far away from US ones.
      The UK is not in the Euro but that is irrelevant with respect to redundancy law and terms.

  • avatar
    AFX

    I remember a time when Americans and Ford didn’t have any problems at all with closing European factories permanently. Back then a couple of days worth of production at Willow Run to build up a squadron of B-24′s loaded with incendiaries, and then mission accomplished. It might not be good for public relations to bomb your own factory, but taking flak from the press is a whole lot easier to deal with than when it’s coming up from down below.

  • avatar
    bill mcgee

    I remember reading somewhere many years ago that both Ford and General Motors were at least partially reimbursed for the damage done to their European factories by allied bombing during World War 2 by the U.S. government . Also that Ford maintained complete cooperation and contact between its domestic headquarters and its German operations until IIRC 1944 , long after Germany had declared war on America. G.M. did also ,but not nearly as long .

  • avatar
    jacob_coulter

    Just like Detroit, those jobs aren’t ever coming back. $200k per person SEVERANCE is absurd, that’s several times what the average American has in their 401k.

    That nonsense simply won’t work in a global economy, which is why Europe is on the brink of collapse.

    • 0 avatar
      lon888

      If the severence is truely $200K per person, then given it is Europe, that probably isn’t too crazy. Been to Europe lately? Gas is $7 to $10 a gallon, houses are crazy expensive, VAT anywhere between 17 to 23% on all goods. Heck, a trip to McDonalds is about $15 per person. That $200K probably isn’t going to go all that far for those guys.

      • 0 avatar
        28-Cars-Later

        I agree with you and as a rational person looking from the outside, I can see the un-sustainability of a model where simple tasks cost about three times their actual worth between legitimate higher supply costs and excessive taxation.

    • 0 avatar
      corntrollio

      If “several” = a little more than two and a half (2.58), then okay:

      www dot cbsnews dot com/8301-500395_162-57569677/401-k-accounts-hit-record-high-is-yours-enough/

      The average among all 12 million Fidelity-managed plan members is $77,300. For 55+, then it’s more like $143,300. For 55+ and contributing for 10+ years, it’s $243,800.

  • avatar
    Big Al from Oz

    @European
    It isn’t anti West what we are saying.

    The West has to realise you can’t go on spending 105% of what you earn, sooner or later it will catch up.

    That’s what happening now. How much money is being paid as interest on borrowings before any tax dollar is going back into the economy.

    The US GDP is made up of 27% in taxation and the US government spending is 38% of GDP. Massive restructing is needed.

    Quantitative easing is $85 billion per month in the US, that equates to $600 per month per worker or $7 200 per year and that’s only this year. This is prior to social security, defence and all of the handout to industry.

    This can’t go one for much longer. The only solution is high interest rates and inflation. Which will force up interest rates further.

    This isn’t just the US its most of the OECD.

    • 0 avatar
      european

      i know Al. it’s not anti-West. i agree with you.

      i am NOT anti-West either. i have realized that living standards in the West HAVE to be lowered whether we like it or not. The West isn’t competitive enough any more.

      BUT the problem, and that is what makes me angry, is that the majority of the westerners don’t see it that way. they just want more ME-ME-ME. and it will get to a point where they start shooting at each other. so in a way, i want to prevent that. because, if people don’t back down, god help us all :(

      EDIT:
      just look at the news from Cyprus. people there burning the German flag and drawing Hitler mustaches on Merkel’s face. Same thing happened in Spain, Italy and Greece. bad mojo is building up and it aint good.

  • avatar
    fabriced28

    Wow! That must be a very old workforce they have there, because even in France that would be a very high package, and we know a thing or two about closed factories!

    @Big Al, European and all politically related commenters
    Big Al is right: the problem is not the economy in itself, the way businesses are run or the level of welfare provided by the state: the problem is that GOVERNMENTS (not businesses, at least not most of them) decided that spending 105% was a good idea, PEOPLE did re-elect them as it looked good, and this finally leads to COMPANIES being run out of business because now both GOVERNMENTS and PEOPLE are broke.
    Easy to identify the causes. Now for the remedy…

  • avatar
    Dimwit

    Ford looked at the future and saw that they needed to do this. They have the balls to actually pull the trigger. The “woe is me” crowd will just have to suck it up. Once Opel goes into bk and PSA bites the dust the market might recover to the point that Ford gets production restrained and they want another plant.

    Watch all the countries line up with cheap money and incentives to locate there. Ford will have a nice, modern plant which reflects their needs going forward. Bonus all around! This is just smart business.

  • avatar
    rnc

    When the auto task force or whatever it was thought it was close to being able to not take GM and Chryco into BK (through new UAW contract and renegotiated bonds, etc. Ford stepped in and re-did a deal with them that set the bar at a point that it essentially guarenteed BK was the only way, have read a few books, task force wasn’t happy with Ford).

    Ford is using the same tactic in europe, they are setting a bar that PSA, Fiat and Opel will have to follow and they are setting it as high as they can.

  • avatar
    George B

    Are there any creative ways to offload a plant on a separate company? For example, Ford could create a separate contract manufacturer to run the Genk plant and sell cars to Ford. Ford pays for them to take take the plant. After a couple of years Ford quits buying cars built in this plant and the contract manufacturer goes out of business, liquidating its assets to partly cover its liabilities. Workers can sue, but good luck getting blood out of a turnip. After the property takes a bath to get rid of worker claims, the land and building increase in value.

  • avatar
    Big Al from Oz

    @European, Geeber and the rest of the interested parties.
    What is different about this global recession, which is why this article is written.

    Commodity prices have remained high. What the West isn’t using is bought up by the developing economies, thus, maintaining high commodity prices.

    Also trade of these developing economies is 50% of global trade. 20-30 years ago it was less than 20%. Also, these new economies are being structured to operate with high commodity prices. We aren’t able to match them and restructure to operate with these new prices quick enough.

    In all previous global recessions all the central banks and governments increased inflation to get growth. This is very awkward at the moment because of the strength of the developing economies.

    We have to compete more fairly now, protectionism isn’t going to work unless we develop a system similar to the old Soviet era and placing an embargo on all developing economies.

    The US with its current “energy boom” will take some of the heat off of the US, but it will not be like it was in the “good old days”. The Europeans will fair worse.

    The US will gradually lose control of dictating commodity prices as the Chinese and others buy more and more. This wil also cause greater swings in USD valuations and interest rates down the track.

    That is why I say the US has to come on board with the rest of the globe, if it doesn’t it will slowly sink. You can see gradual changes in the US already.

    Survial is the name of the game.

  • avatar
    50merc

    Politicians who propose to take (or borrow) from Peter to pay Paul will receive hearty approval from Paul. Free donuts–while they last! Which won’t be forever, as Greece is learning.
    And there is a more important and indisputable reason the self-indulgence won’t last: Europe is committing demographic suicide. (Japan is even further along.) They aren’t having enough babies to keep the machine running. It is the people 20 to 55 who produce goods and services, form families and provide the next generation, and launch new ideas and enterprises. Now it’s too late to reverse the process. Well, except by importing tens of millions of Haitians, Algerians, Pakistanis, Indonesians, Sudanese, etc. But that new and very different society wouldn’t be culturally French, Italian, Austrian, etc., will it?

    • 0 avatar
      danio3834

      Not to mention ever tightening xenophobic immigration policy. It’s always amusing when people in countries that thrived due to massive immigration try and turn people away because “country’s full”, “took er jerbs” or some variation.

    • 0 avatar
      Big Al from Oz

      @50merc
      I like your logic, sex (or lack of) is always the problem:)


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