2nd UPDATE: Ford Europe To Trim Output Capacity, Costs
March 16 2009 - 9:25AM
Dow Jones News
Ford Motor Co.'s (F) European division Monday said that it was
adjusting production capacity to shrinking demand and signaled that
further steps will follow to lower costs and to ensure
profitability.
"Cutting capacity, reducing costs and safeguarding our future
product plans are essential actions for Ford of Europe to sustain a
viable business for the future," said Ford of Europe Chief
Executive John Fleming in a statement.
"Ford of Europe must return to sustainable profitability as soon
as possible. We will do whatever it takes to ensure the continuing
viability of our business, and further actions can be expected,"
Fleming added.
In addition, Ford's European unit said it is realigning its
sourcing plans to meet its future business needs, given that demand
is unlikely to improve significantly in the European market "for
some considerable time."
The actions in Europe mainly affect Ford's operations in Germany
and Spain as well as its new Romanian manufacturing facility in
Craiova.
In Spain, the Valencia plant will move to a two-shift pattern
from May 1 from three shifts currently. "Further discussion is
continuing with all parties on how to manage the surplus labor in
the short-term," it said.
The Fiesta production will continue at Valencia, and Ford Focus
production will be replaced by production of the next-generation
Ford C-MAX.
In Germany, the Saarlouis plant will continue with its current
plan of shorter working hours. "The current labor level will be
reviewed on a regular basis to determine if it is sustainable,"
Ford said, adding that Saarlouis was confirmed as the lead plant
for all derivatives of the next-generation Focus model. However,
the Kuga and C-MAX production won't be replaced there when
production ends, it said.
The German engine plant in Cologne will share the production of
a new, small-displacement EcoBoost petrol engine with the Craiova
plant in Romania.
"I believe the important actions we have announced today ...will
enhance Ford of Europe's ability not only to survive the ongoing
current economic crisis, but to emerge from it as a stronger and
more competitive business once the economic situation eventually
improves," Fleming said.
Ford's announcement echoes similar cutbacks at many other
automakers in Europe as demand for new cars continues to slump and
companies slash output to avoid the buildup of inventory.
The European division of Detroit peer General Motors Corp. (GM)
is currently seeking EUR3.3 billion in state aid from Germany and
other governments in the region to stave of insolvency.
However, Ford's sales in Europe have been less severely affected
by the market downturn than those of GM.
According to the European Automobile Manufacturers Association,
or ACEA, Ford last month posted a 12.7% fall on the year to 95,164
new-car registrations in Europe. This was despite a 31% slump at
the Volvo brand to 13,514 cars. Registrations for Ford's core brand
were down 8.6% on the year at 81,650 cars, while the overall market
was down 18% on the year.
GM saw registrations fall 22% on the year in February to 86,344
cars in Europe.
Company Web site: www.ford.com
-By Christoph Rauwald, Dow Jones Newswires; +49 69 29 725 512; christoph.rauwald@dowjones.com