Ford seeks reduced European capacity without plant closing
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TRAVERSE CITY, Mich. -- Ford Motor Co. is studying plans to correct its factory over-capacity issues in its money-losing European unit -- but not necessarily by closing a plant there.
"There are lots of ways to tackle over-capacity without shutting a factory," says John Fleming, the automaker's executive vice president in charge of global manufacturing and labor affairs.
Fleming said Ford is actively considering alternatives to bring down production capacity, but he declined to say when the plan might be enacted.
"It will be as soon as possible," he said, speaking after a presentation at the 2012 CAR Management Briefing Seminars here today.
Europe's stalled new-car market has become a drag on global automakers. Various companies have bemoaned the industry's factory over-capacity there.
Fleming said Europe's over-capacity is hurting the company's profit margins. Ford posted a $553 million pre-tax loss in Europe during the first half of the year compared with a $469 million pre-tax gain during the same period last year.
One wrinkle in the planning is that Ford is otherwise in global expansion mode.
It is simultaneously trying to move all of its plants around the world to more efficient 3-shift work schedules -- a move that results in more capacity. At the same time, it is also in the throes of launching or constructing nine new auto plants around the world, Fleming says.
At the same time, Ford is preparing to add 400,000 units of capacity to its U.S. plant network, Fleming said, by adding work shifts in Chicago, Louisville, Kansas City and Michigan.
Fleming said the company anticipates that overseas markets will represent 57 percent of Ford's business in 2020, up from 28 percent in 2000.
You can reach Lindsay Chappell at lchappell@crain.com.
