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Old 10-02-2003, 07:11   #1 (permalink)
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E.U.:Ford's latest job cuts outrage Belgians

Carmaker trims 3,000, blames European sales

October 2, 2003
BY RAF CASERT
ASSOCIATED PRESS

BRUSSELS, Belgium -- Ford Motor Co. cut more deeply into its workforce Wednesday, scrapping 3,000 jobs in Belgium because of Europe's deteriorating car market.

The announcement came on the heels of news earlier this week that Ford will eliminate 1,700 jobs in Germany and more than 3,000 jobs in North America.

In reaction to the Belgian announcement, unions locked out deliveries of new supplies to Ford's main Genk plant, forcing management to interrupt production. More extensive labor action was likely over the coming days.

"We'll hit Ford where it hurts," said union representative Ludo Copermans.

Prime Minister Guy Verhofstadt immediately convened a meeting with Ford management and called its decision "unacceptable behavior." Ford is one of the biggest private employers in Belgium. Almost 10,000 people work at the Genk factory.

The authorities are angry because they had provided economic aid based on the promises Ford would maintain employment, said regional economics minister Renaat Landuyt. "We are talking about a multinational which is changing its tune, to put it mildly," he said.

Ford said it was forced to take action because of the depressed market.

"We need to adjust our business to the new realities in the European industry," said Ford of Europe President Lewis Booth. "We are taking steps to accelerate cost reductions."

Unions fear it would lead to a further scaling down of the plant in the eastern city, where Ford has already cut jobs in the last decade. Genk's economy is heavily dependent on the Ford plant.

In other recent cost-cutting moves, Ford's German division said Monday it plans to trim about 1,700 jobs, or 6 percent of its workforce, by year's end. In North America, Ford said Tuesday it will eliminate 1,700 contract workers, 1,300 vacant salaried positions and 50 salaried employees in the coming month.

Under the Genk plan, the automaker said it would cancel planned investment of some $1.04 billion in a line to produce the new Ford Focus. Now, the Focus will be produced in two instead of three European plants.

Ford said it will also move from three to two production shifts for its Mondeo at Genk.

"With lower industry outlooks, a larger number of competitors and escalating marketing costs, we must concentrate on maximizing out product lineup while minimizing our spending," Booth said.

Big losses in Europe have dragged down Ford's earnings. Ford of Europe's pretax loss ballooned to $525 million in the second quarter from a loss of $18 million in the same quarter a year ago.

The European losses are blamed on lower prices, an unfavorable vehicle mix and falling sales volume.

In trading on the New York Stock Exchange, Ford shares rose 33 cents to close at $11.10.
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