By on October 25, 2012

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.

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26 Comments on “Ford Closes Three EU Plants In A Week. Analysts Love It...”

  • avatar

    Sad really. but not being Euro and not about to receive any kind of assistance, I guess Ford had no other option.

    • 0 avatar

      European companies are not likely to receive much assistance, either, the EU rules won’t permit it.

      Two assembly plants and a stamping plant closed: clearly Ford is not expecting substantially increased sales in Europe in the foreseeable future. (I’m speaking specifically of Ford sales here, rather than the market at large.)

      • 0 avatar

        Hi th009. Don’t believe that, sorry. When push comes to shove, the French, the British, the Germans, even the italians will do as they like and no one can do anything about it. The moment is critical. Not just in the car industry. If people start shaking their fingers at the EU, that’s the end of it. Political considerations will prevail.

      • 0 avatar

        @Marcelo, we’ll have to agree to disagree on this, and wait and see what actually happens. EU rules are pretty strict on this, and companies (such as Deutsche Post) have had to repay aid before.

      • 0 avatar
        johnny ro

        Marcelo may mean, the end of EU, and each country saves what it can. This is not entirely unrealistic, if one believes the press on poliitics and finance over there.

      • 0 avatar

        I agree to disagree! No problem.I respect your opinions and the knowledge you display on this site immensely.

        I stress though, this thing is a killer. It involves all the economy of Europe. Therein lies the justification for state action. Banks could be in trouble again soon (Santander, BBVA), housing etc. It’s not just the car industry.

        Will Europe prefer to be pulled apart, or will it let member atates that are accountable to their population do what said populations could start to think they must?

  • avatar

    This is “One Ford”, guys. It was completely predictable, and completely in character for Mulally-era Ford. Analyze, decide, implement as sensitively as possible, while being decisive. Boom, done. No matter what else happens, no matter what anyone else does, they’ll be breaking even in a couple of years. This is how you run a business.

    Contrast with GM under Akerson, which has been dithering for almost a year now.

    • 0 avatar

      I think it is a decision on the run, nothing to do about “One Ford”. What happened to the reemergence of Lincoln and the supposed “Global Mustang”? All ideas that have died. Ford needs to do some effective strategic planning.Their Mondeo and Fusion sedans are not bringing in the money. They have pulled out of the Global HDT Truck, SUV, Sportscar markets and they are trying to establish a market with the Global Ranger. A better more reactive management is required.

  • avatar

    Unions never have a good thing to say about employers until the jobs go away.

  • avatar

    …and Ford doesn’t even lose as much money as GME does. Your move, GM! Show us what you got. You want to prove you’ve changed and things are not the same as the old GM? Here’s your chance…

    Sales are going to decline further and whatever overcapacity there is now will only get much worse.

  • avatar

    Transit – “Backbone of Britain”?

    Think more and more companies in the UK are ditching the transit these days anyway for German products. This will encourage the migration.

  • avatar

    “demonstrating the vision and industrial courage” Disgusting

  • avatar

    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

    • 0 avatar

      Clearly trolling here or just ignorant of the landscape. Fords are quite popular in England, and it has much more to do with the European economic woes than Fords not being bought. Perhaps you missed the last line of the article:

      “Europe has factory capacity to build about 22 million units a year. This year, sales of 14 million are expected.”

      • 0 avatar

        If Ford is so popular in England, then let the sales of it’s cars pay the bills rather then to ask everyone else to do so. I can imagine England is a hell of a tough place to run a business. (Not that the US is far behind.)

        Good move for Ford to close these plants.

    • 0 avatar

      Jac Nasser, is that you?

    • 0 avatar

      Mediocre huh? Please explain how. I would say FOE is exceptional among the mass market products. The fact that they are not engaging in the VW initiated Euro price war and take their lumps now makes business sense as China and NA operations are doing well.

      • 0 avatar

        The price war is very much mutual — almost all manufacturers are taking part, and it’s very difficult to say who “started” it. Most likely the discounts just got out of hand.

        Ford, GM, Chrysler etc don’t complain about $3K average incentives (not including retail discounting!) in USA …

  • avatar

    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.

  • avatar

    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.

  • avatar

    “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.

    • 0 avatar

      Yes, it was, but Ford would have had no idea at the time they authorized development on the LS as a future competitor. In fact, even when the Catera first went on sale, it was greeted with significant critical acclaim. It was only after they went into regular use among the general population that their faults started coming to light.

      • 0 avatar
        el scotto

        Experts,whose livelihood is to praise vehicles, praised the Catera. Then the general public, i.e. paying customers, started complaining about how bad their cars sucked. GM learned nothing from the X Car debacle. The LS was no great shakes either.

      • 0 avatar

        “GM learned nothing from the X Car debacle.”

        And to take that one step further, no one can deny that the Volt is the most advanced vehicle GM has ever put on the market, and the “Experts,whose livelihood is to praise vehicles, praised (it).” Initially, at least. Ahhh, we all had high hopes.

        But, like the X Car, the Volt never caught on because, like the X Car, it was the answer to a question never asked by the “general public, i.e. paying customers.”

        Now, if the planet would suddenly run out of oil? Conceivably that could be a game changer.

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