THE decision to close Southampton’s Ford Transit factory was made 4,000 miles away, on the outskirts of Detroit – also known as “Motown”.
With a successful revamp of its US business behind them, Ford bosses sitting in the company’s headquarters in Dearborn, dubbed the Glass House, were forced to start planning something similar in Europe as losses mounted this year from a sharp slump in car sales.
It remains unclear exactly when the Southampton plant closure become an option, and Ford is refusing to say.
But the hammer blow for Southampton came last Thursday when Ford announced its plan to shut its Swaythling factory next July, as well as cease tooling and stamping operations in Dagenham, with the loss of 1,400 workers.
A day earlier, workers at Ford’s plant in Genk, Belgium, were told their 50-year-old plant would be shut by 2014 with 4,300 job losses.
The cost-cutting plans had been hatched by the leadership team at Ford of Europe’s headquarters in Cologne, Germany, but it was the board of its US parent, Ford Motor Company, that signed them off the Friday before they were announced to the world.
Ford was said to be considering in mid-September closing at least one of its European plants in order to cut costs, according to people familiar with the company’s thinking.
Southampton and its Belgium plant in Genk were said to be the likeliest to be shut down.
Ford revealed in July it was on course to make a $1 billion loss in Europe, double a projection it gave earlier in the year.
At the time, Ford’s chief financial officer Bob Shanks said it was “premature” to discuss plant closures but admitted it was a “very serious situation”.
But chief executive Alan Mulally said Ford could use its US turnaround plan of the past six years as a blueprint to cut costs.
This saw Ford cut capacity in North America by a quarter, axe nearly one-third of its workforce and cut wages for entry-level workers, as well as borrowing $23.5 billion, avoiding the bailouts from the US government needed by rivals GM and Chrysler when the great recession struck.
After unveiling its European restructuring plans to help save $450m a year and tackle a revised $1.5 billion loss for this year, Ford is now projecting that its European operations will once again be profitable by the middle of the decade.