Union: Ford To Close Southampton Van Plant, Dagenham Tool, Stamp Unit

By Marietta Cauchi

LONDON--Ford MotorCo. (F) is to close its Southampton van plant and its tool operations and stamping plant at Dagenham, the U.K.'s GMB Union said Thursday.

The closures, to take place by summer 2013, will result in a loss of around 1500 jobs in total and end the U.S. auto maker's long history of vehicle-manufacturing in the U.K. Ford produced its first car in the U.K. in 1911. Ford is retaining its diesel-engine production plant at Dagenham and its petrol engine production plant at Bridgend. It will also keep its transmission-making joint venture with Getrag at Halewood.

The widely expected announcement comes just a day after Ford announced the closure of a plant in Genk, Belgium by the end of 2014 and is just one of a series of cuts by the U.S. auto giant as it negotiates the worsening European market by stripping out costs.

It takes Ford's planned job losses in Europe to nearly 6,000 over the next two years.

"This is devastating news for the workforce of Dagenham and Southampton and for the U.K. manufacturing industry, said Justin Bowden, GMB national officer. The news came as latest economic data showed the U.K. economy pulled out of recession in the third quarter.

Ford officials weren't immediately available for comment.

Ford's plans are the most drastic yet by European auto makers as they cope with the industry's chronic overcapacity, made worse by a slump in car sales in the region to their lowest level since the early 1990s.

The European restructuring plan is an attempt to match its success in revamping its U.S. business in recent years. Under CEO Alan Mulally, Ford borrowed $23.5 billion to help speed a sweeping restructuring plan in the U.S. Ford cut 30% of its salaried workforce, reduced plant capacity by 25% and gained concessions from U.S. unions, including a lower wage rate for entry level workers.

Mr. Mulally's plan in the U.S. also included big investments in new products and promises to unions that if they agreed to concessions, the company would reinvest in some plants, a promise the company has upheld. Profit in North America more than offsets losses in Europe and Asia while Ford's operations in South America break even.

Despite the deep cuts, Ford's approach to restructuring has been to avoid battles with unions and agree to more expensive settlements upfront, so long as they accomplish the stated goal.

General Motors is expected to announce next week more details about the restructuring of its money-losing Opel unit. Vice Chairman Stephen Girsky is attempting to fashion together a plan that would include trimming management and hourly workers along with reaching a definitive plan to close the aging Bochum, Germany, plant. The plant employs about 3,100 workers and no new vehicles have been slated for production after the Zafira minivan concludes in 2016. Closing the plant could save GM as much as $2 billion. Opel is also expected to expand a buyout program across its three remaining plants to help with its downsizing efforts.

Write to Marietta Cauchi at [e-mail]

Mike Ramsey and Jeff Bennett in Detroit contributed to this article.

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