| Union representatives at Ford's Genk plant in Belgium have been summoned to an emergency meeting on early Wednesday morning. No reason has been given, but unions expect the worst, says Reuters: The closure of Ford's Genk factory. "No one is allowed to tell us anything," an official of the ABVV Metaal union told Reuters. "We're assuming it will be a very serious announcement." Ford declines to comment. Rumors of a plant closure had been swirling since Ford doubled its European loss forecast to $1 billion in July and said that Ford Europe needs to "decrease our production to match real demand". Ford's EU sales were down 14.9 percent in September and 12.6 percent for the year. The plant employs 4,300 workers which make the Mondeo, the Galaxy and the S-MAX minivans. All are at the end of their life cycle. Ford will present third-quarter financial results on Oct. 30. UBS analyst Colin Langan said that Ford's European factories are running at 52 percent of capacity, and predicted that "Ford is most likely to close its assembly plant in Genk," due to the plant's "consistently low utilization level". Contrary to conventional wisdom, it is fairly easy to close a plant in Europe. However, it is obscenely expensive. Workers must receive generous severance payments. Langan figures that closing the Belgian factory would cost some $1.4 billion euros, or $ 332,000 per worker, against annual savings of $730 million.
from The Truth About Cars http://www.thetruthaboutcars.com | |||
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