Ford Europe to Cut Capacity, Costs

Ford Motor Co.'s European division Monday said it was adjusting production capacity to shrinking demand and signaled that further steps will follow to lower costs and to ensure profitability. "Cutting capacity, reducing costs & safeguarding our future product plans are essential actions for Ford of Europe to sustain a viable business for the future," said Ford of Europe CEO John Fleming. "Ford of Europe must return to sustainable profitability as soon as possible. We'll do whatever it takes to ensure the continuing viability of our business, and further actions can be expected," he added. In addition, Ford's European unit said it is realigning its sourcing plans to meet its future business needs, given that demand is unlikely to improve significantly in the European market for some considerable time. The actions in Europe mainly affect Ford's operations in Germany and Spain as well as its new Romanian manufacturing facility in Craiova. In Spain, the Valencia plant will move to a two-shift pattern from May 1 from three shifts currently. "Further discussion is continuing with all parties on how to manage the surplus labor in the short-term," it said. The Fiesta production will continue at Valencia, & Ford Focus production will be replaced by production of the next-generation Ford C-MAX. In Germany, the Saarlouis plant will continue with its current plan of shorter working hours. "The current labor level will be reviewed on a regular basis to determine if it is sustainable," Ford said, adding Saarlouis confirmed as the lead plant for all derivatives of the next-generation Focus model. However, the Kuga & C-MAX production won't be replaced there when production ends, it said. The Cologne German engine plant will share the production of a new, small-displacement EcoBoost petrol engine with the Craiova plant in Romania. "I believe the important actions we've announced will enhance Ford of Europe's ability not only to survive the ongoing current economic crisis, but to emerge from it as a stronger & more competitive business once the economic situation eventually improves," he said. Ford's announcement echoes similar cutbacks at many other auto makers in Europe as demand for new cars continues to slump and companies slash output to avoid the buildup of inventory. The European div. of Detroit peer GM is currently seeking