THE CRISIS in Europe’s car industry deepened yesterday when Ford cut production and prolonged into the future a shortened working week at two of its core continental plants.
Ford executives battened down the hatches for a prolonged downturn by warning of more cuts to come. Their comments came as consultants forecast bankruptcies among suppliers as assembly line volumes collapse by a third this year.
Ford’s move came as Germany’s economics minister Karl-Theodor zu Guttenberg launched a series of emergency talks in the US with banks and President Barack Obama’s economic advisers on a €3.3 billion plan to rescue General Motors Europe from insolvency.
Industry executives are warning that only two or three of Europe’s 10 big carmakers will survive the sector’s worst crisis for almost 80 years and are forecasting a spate of mergers, takeovers and closures along with tens of thousands of job losses. The sector is being kept alive by “scrappage” schemes in eight mainland European countries. Britain is reportedly to offer £2,000 (€2,160) to consumers to buy eco-efficient models.
Yet to demand government bailouts in the US or Europe, Ford is cutting output at its Valencia plant in Spain by moving from a three-shift to a two-shift operation. It said the plant would build a new 2-litre eco-petrol engine from later this year, and the new C-Max model.
At Saarlouis, south-west Germany, the workforce will continue on a four-day week for the foreseeable future, but the plant will be the main source of the new-generation Focus.
Ford made $1 billion (€770 million) in Europe last year despite losses in the final quarter, and has yet to lay off staff. It said cutting capacity and costs and protecting product plans “remain essential” to sustaining the firm. John Fleming, chairman and chief executive, said demand was unlikely to improve significantly in the European market for some considerable time. – (Guardian service)