Ford plans 4000 temporary layoffs in Europe as industry sales weaken

ERJ staff report (AN)

Frankfurt, Germany -- Ford Motor Co. will temporarily lay off 4000 workers next year at its assembly plant in Valencia, Spain, as demand slackens in Europe.

The automaker will give the employees a leave of absence for 39 days over the course of 2012, said Adrian Schmitz, a spokesman for the company's European operations.

"This downtime is related to product changeover at the plant and the expectation that demand will remain weak next year across the European industry," said Schmitz, who's based at Ford's European headquarters in Cologne, Germany. "The decline in demand in both Spain and Europe is affecting all of the industry."

The factory employs 6200 workers.

"It is certainly a sign of frail demand," said Juergen Pieper, a Frankfurt-based transport analyst at Bankhaus Metzler. "It's only likely to get worse. More manufacturers will see sales worsen next year, and this will lead to more job cuts."

Assembly of Ford's Fiesta hatchback will end at the plant next year, with production shifting to the Kuga compact sport-utility vehicle and Transit Connect delivery van.

PSA Peugeot Citroen has said it would eliminate as many as 3500 permanent staff, while Renault SA and General Motors Co. announced the temporary suspension of some car production lines in France and Spain, respectively.

The layoffs at the Ford plant will reduce production 34 percent, El Economista reported today.

Weak 2012

Ford has overtaken Fiat this year to become the fifth-biggest automaker in Europe, according to the European Automobile Manufacturers Association, or ACEA.

Ford sold 6.4 percent more vehicles in October than a year earlier, while the European market shrank 1.4 percent. Sales in Spain fell 6.7 percent, the biggest decline among Europe's five biggest car markets.

Ford is in a better position to deal with lower demand next year than rivals Renault, Peugeot and Fiat SpA, while not in as strong a position as Volkswagen AG, Bankhaus Metzler analyst Pieper said.

"It is clear that the decline in demand in both Spain and Europe is affecting all of the industry.

Assembly of Ford's Fiesta hatchback will stop at the plant next year, with production shifting to the Kuga compact SUV and Transit Connect delivery.

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Article from Automotive News (a Crain publication)