Ford to pay $750 million severance to workers at Belgium plant
To stem financial losses in Europe, Ford announced in late October that it would close three European plants, including a Genk, Belgium, factory, pictured.
Photo credit: BLOOMBERG FILE PHOTO
DETROIT (Reuters) -- Hourly workers at Ford Motor Co.'s plant in Genk, Belgium, will get $750 million in severance as part of a deal that allows the automaker to close that factory by the end of 2014, the company said on Tuesday.
Ford and the 4,000 hourly workers at the plant reached a deal last week that allows the U.S. automaker to go through with its plan to close the factory, which currently builds the Mondeo sedan.
The $750 million cash payout comes to an average of $187,500 per worker. Negotiations over severance between Ford and the plant's 300 salaried workers have started, the automaker said in a regulatory filing.
Ford will log the severance costs as a special item.
This year, Ford expects to lose about $2 billion in Europe, where an economic downturn has hurt consumer demand for new cars. European car sales logged their worst February in at least 23 years, industry figures showed on Tuesday.
To stem its losses in Europe, Ford said in late October that it would close three European plants, including the Genk plant. In all, Ford plans to cut 18 percent of its capacity in Europe.
The decision triggered angry protests in Cologne, Germany, where Ford's European operations are based. In November, about 170 protesters burned tires and threw fireworks at police outside a Ford plant in Cologne.
Ford CEO Alan Mulally and other executives have said they will not rule out further capacity cuts and other actions to cut costs if the situation worsens in Europe.
Ford shares were off 0.75 percent at $13.16 in late trading on the New York Stock Exchange.Contact Automotive News