Ford Plans Emergency Meeting at Vulnerable Belgian Plant

Ford Motor Co. has called an emergency meeting this week with unions at its underutilized Belgian factory in Genk, a labor leader said.

The management has invited representatives of the three unions at the plant to discuss the “economic crisis” on Oct. 24, Rene Champagne, a representative for Belgium’s ABVV Metaal union, said in a telephone interview. Ford has not given more details about the meeting, Champagne said.

Ford plans to close the factory to reduce capacity in Europe and aims to do so by the end of 2013, the Frankfurter Allgemeine Zeitung reported today, citing unidentified company executives. John Gardiner, a Ford spokesman in Europe, declined to comment.

The plant, which employs about 4,000 workers, is considered by analysts as vulnerable to closure because Ford has said it used only 68 percent of Genk’s manufacturing capacity last year. The vehicles produced in Genk are at the end of their lifecycles, with a new version of the mid-sized Mondeo to be introduced to the market in late 2013. The plant also builds the Galaxy and S-Max minivans.

Ford still has work to do in adjusting its factory capacity to declining demand, European sales head Roelant de Waard said Sept. 27, echoing earlier comments from Chief Executive Officer Alan Mulally. The automaker announced plans the previous week to cut “a few hundred” jobs in the region because of declining sales.

Declining Sales

Ford’s European sales have declined 12 percent this year as the region heads for the biggest annual plunge in 19 years. Ford forecasts a loss of more than $1 billion in the region in 2012.

“The only thing they are willing to say is that they’re not allowed to say anything until Wednesday morning,” Champagne said.

Of the Dearborn, Michigan-based carmaker’s European facilities, the Genk plant is the most likely to be closed, Colin Langan, an analyst at UBS Investment Research, wrote in a Sept. 17 report. Shutting the factory would result in potential annual savings of about $500 million and could be completed by the end of 2013, he wrote.

The U.S. company’s European pretax operating losses widened to $404 million in the second quarter from $149 million in the first quarter. The business earned a profit of $176 million a year earlier.

Ford is utilizing just 63 percent of its factory capacity in Europe, according to Morgan Stanley. The automaker needs to reduce capacity by at least 20 percent, Adam Jonas, a New York-based analyst for Morgan Stanley, said in September. The automaker’s European losses could reach $1.5 billion to $2 billion this year, he estimated.

(Corrects spelling of Ford CEO’s name in story from yesterday.)
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