|Chennai||Rs. 28730.00 (1.13%)|
|Mumbai||Rs. 29740.00 (-0.13%)|
|Delhi||Rs. 29200.00 (0%)|
|Kolkata||Rs. 29350.00 (0%)|
|Kerala||Rs. 28000.00 (0%)|
|Bangalore||Rs. 28400.00 (0%)|
|Hyderabad||Rs. 28470.00 (-0.11%)|
By Rhys Jones and Deepa Seetharaman
LONDON/DETROIT (Reuters) - Ford motor Co
Ford told British unions Thursday it would scrap its Southampton van factory and an associated stamping facility in Dagenham in mid-2013, slashing 1,400 jobs and ending vehicle manufacturing by Ford in Britain.
The move comes a day after Ford announced it would close a major car plant in Genk, Belgium, in late 2014. In all, Ford cut 6,200 jobs and reduced European production capacity by 18 percent to save $450 million to $500 million a year.
Ford also said it expects to lose more than $1.5 billion in the region this year, up from its earlier $1 billion forecast. Ford expects a similar loss next year, when the European car sales are expected to be, at best, on par with 2012 levels.
"We are really trying to reflect the reality" of the economic slowdown and industry downturn in Europe, Chief Executive Alan Mulally told analysts and reporters on a conference call. "That's why we need to move decisively now."
With no market recovery in sight, car makers are struggling to scrap underused factories and cut surplus jobs that are fueling losses in Europe. The Southampton plant was the fourth European vehicle plant closure announced this year.
Workers at Ford's British plants were distraught. "It's a kick in the teeth," said Dominic O'Callaghan, a shop steward at Dagenham. "The guys worked hard."
Thursday marked the second time this year Ford has boosted its estimated loss for Europe, reflecting the rapid, surprising deterioration in a region where Ford lost $27 million last year.
In early 2012, Ford forecast a loss this year of up to $600 million in Europe. In July, that estimate ballooned to $1 billion. Now Ford says it will lose at least $3 billion this year and next, when vehicle sales in Europe are expected to hover at or below 14 million.
"If you had asked me two years ago, I would have said that's the trough," Stephen Odell, Ford's head of Europe, said on the conference call. "It's difficult to predict. It does feel like we're running at a very low level."
Ford's actions cap a grim week for the industry. Chinese-owned Volvo Car Corp said it was cutting production in Belgium, while Germany's Daimler warned that profit margins would not improve next year.
Ford's plant closures will not be enough to address the industry's broader problems. Production capacity in Europe outstrips current demand by 9 million vehicles, Guggenheim analyst Matthew Stover estimated.
To cope with the flagging market, Ford has cut marketing and advertising costs, offered buyouts to salaried workers and taken out "any flex we saw in the system," Odell said.
But executives also left open the possibility of further actions if a recovery in Europe fails to materialize.
"What we'll continue to do is look at the reality that we're facing, just like we do every day, all the time," Chief Financial Officer Bob Shanks said in an interview. "We'll respond as appropriate to strengthen the business."
Shanks said Ford should post a smaller European loss in 2014 before being profitable in the region by mid-decade. Ford is aiming for operating margins between 6 percent and 8 percent in the medium term.
During the conference call, Odell raised questions about the legality of PSA Peugeot Citroen's
Meanwhile, General Motors'
"What's remarkable about Ford is how quickly things are moving, which is a sign of good management," said London-based UBS analyst Philippe Houchois. "With GM Europe, you always wonder what's going on - it looks like they are still bogged down in deciding what to do."
Future versions of Ford's Mondeo, S-MAX and Galaxy, currently assembled in Genk, will be moved to the automaker's plant in Valencia, Spain. The new Mondeo, which made its public debut last month at the Paris show, will be introduced in late 2014, at least 18 months later than originally scheduled.
Southampton's production, which last year fell short of 30,000 vehicles, is to be transferred to Ford's existing Transit plant in Turkey, under the plans announced on Thursday.
Ford's stamping and tooling plant in Dagenham, Essex, will also close next year, the company said. The facility employs 930 workers.
Staff in Southampton were told to down tools and take the day off as news of the closures broke, and most said they were heading to the pub. The U.S. automaker currently employs 11,400 British workers at sites including Halewood, near Liverpool, and Bridgend in South Wales.
Britain will remain a centre of "powertrain excellence" for the automaker, Odell said.
The company announced a "next-generation low-CO2 2.0-litre diesel" to be made in Dagenham that would power future Ford vehicles from 2016. It also said additional investment was expected at Bridgend to support ongoing high volumes of gasoline engine manufacturing.
"Ford is demonstrating the vision and industrial courage to make tough decisions today that will pay off long term," Morgan Stanley analyst Adam Jonas said in a note to investors.
Jonas, who had previously expected Ford to continue reporting European losses through 2015, said its restructuring measures could bring the breakeven forward one year. (Additional reporting by Alessandra Prentice, Andreas Cremer; Writing by Laurence Frost; Editing by Kate Holton, Philippa Fletcher and Steve Orlofsky)