The latest development in this ongoing saga that is the European economic crunch is word that Ford will shutter production of its Genk Assembly Plant in Belgium, eliminating some 4,300 positions. Ford could potentially reduce costs by $300 to $500 million annually as a resulting of closing the production facility. The Genk plant currently produces the Mondeo, S-MAX and Galaxy vehicles. Assembly of these vehicles would cease at the plant by the end of 2014.
According to Ford, it lost $404 million in the European market. Its losses in Europe for the year have been estimated anywhere from $1 billion to 1.5 billion.
Ford's European production capacity could be reduced by 15 to 20 percent by closing the plant, according to Morgan Stanley Research. And Itay Michaeli, an analyst at Citi Investment Research, explained that the closure of the Belgian plant won't improve Ford's profits. In fact, the costs associated with closing the plant could be close to $1 billion.
But, According to Ford, it needs to restructure to combat slow sales in Europe. In a press release from the company, it is said that production of the Mondeo, S-MAX and Galaxy could move to Ford's Valencia, Spain facility. It is also said that production of the C-MAX and Grand C-MAX could move from Valencia to Saarlouis, Germany, in 2014. Ford says is will divulge further restructuring details tomorrow. In the meantime, check out the press release regarding Ford's European plans below.