Ford moves Southampton production to Turkey

LONDON/DETROIT – Reuters

A security guard walks to his post after locking the gates at the Ford Transit van factory, after staff were sent home early in Southampton, south England October 25, 2012. REUTERS photo

Ford Motor plans to move its 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 Oct. 25.

Otosan, a joint venture of the the U.S. car maker and Turkish conglomarate Koç produces cars in the Gölcük town of Kocaeli province bordering Istanbul.

Ford unleashed a second volley of European job cuts and plant closures in a bid to halt regional losses that the automaker now expects to surpass $3 billion over two years.

Ford told British unions on Oct. 25 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 came 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.

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 center of “powertrain excellence” for the automaker, Stephen Odell, Ford’s head of Europe, said on the conference call.

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.