LONDON —Motor Co.'s rigorous European restructuring will leave the company healthier across Europe but will end nearly 70 years of British Ford carmaking and cut 1,900 jobs.
capped weeks of speculation when it announced earlier in the month that it would stop building Fiesta cars at its Dagenham, U.K., plant during first quarter 2002. Production is being transferred to Cologne, Germany, where the vehicle also is built.
Ford needed to cut capacity in Europe, says Nick Scheele, Ford of Europe chairman, and one plant had to go. The automaker's capacity in the region reached 2.25 million units in 1999, but it sold only 1.65 million units in the year.
Ford chose to continue production at Cologne because the plant is more efficient and, as the site of former Scorpio production, more flexible. “Sadly, Dagenham does not have the infrastructure flexibility that Cologne has,” Scheele says.
Ford, however, will invest US$500 million over five years to Dagenham's engine plant, making it the company's global center for diesel engine production and adding 500 jobs and 80,000-100,000 units per year, to be sold to Jaguar and outside customers.
Ford is asking for voluntary redundancy for the net 1,400 jobs to be cut and will provide a US$12 million employee support program for workers and their families.
The plan is part of US$1 billion in European cost reductions. The automaker, which already took a charge for the restructuring, says it made only US$28 million on US$30 billion turnover in Europe last year. Ford also plans to:
Debut nine new models per year for the next five years vs. three new models per year for the past five years.
Form a joint venture withGetriebe-und Zahnradfabrik to design and build manual transmissions in Ford plants at Bordeaux, France; Halewood, U.K., and Cologne, Germany.
Consider a JV for its forging and die casting operations in Cologne.
Move commercial vehicle engineering from the U.S. to the U.K., creating 360 new engineering jobs.
Likely invest in its Wales Bridgend engine plant to build a new gasoline engine, upping annual production by 250,000 units.
Stop Escort and Transit production in Belarus, where only 195 units were built last year and 1,258 in 1998.
Further invest in Dagenham, including US$50 million to regenerate the complex and US$26 million and US$10 million for improvements in the press shop and wheel plant, respectively.
Invest US$15 million in a central London design center.