BRUSSELS -- Ford Motor Co. said on Monday it would cut production at its Belgian plant and was considering reductions at other European factories in response to falling demand.
The move to idle production of Mondeo cars at Genk, Belgium, for more than a week underlines the pressure carmakers in Europe are facing and marks a hangover of sorts for Ford following its centenary celebrations last week in Detroit.
New car registrations have fallen 3.8 percent so far this year in western Europe and carmakers are fighting weak consumer sentiment by offering discounts and free extras on models in a bid to shift stock, but production cuts at several automakers look unavoidable.
Ford Belgium said it would cut production of its executive-class Mondeo model by 11,000 cars in the second half at Genk, temporarily furloughing the line's workers.
"We feel obliged to cut production capacity," Ford Belgium spokesman Wilfried Baeken told Reuters, referring to a slump in the car market. He said capacity could be reduced even further.
The plant in eastern Belgium employs some 10,000 workers who daily produce 1,650 Mondeos alongside 480 Transit vans.
Production of the Transit will be phased out by January 2004, and moved to Turkey.
UK, SPAIN CUTS FEARED
A trade union official said there was talk of further production cuts at other European sites of Ford, including Southampton in Britain, and Valencia, Spain and he said Ford may cut output by about 80,000 vehicles.
A Ford spokesman in the UK said there had been no announcements of any cuts at Southampton.
"We are looking into the situation but no other decisions have been taken yet," said a spokesman for Ford Europe in Cologne, western Germany, adding that the company would finalise its plans in the next few days.
Ford Europe, which has slashed costs, cut jobs and introduced a range of new vehicles in a bid to return to sustainable profits, sold 1.3 million cars in Europe last year.
In the year so far, it has sold 592,000 cars, down slightly from a year ago, but its market share has edged up to 9.1 percent, said the Ford Europe spokesman.
The move is a sign that Ford is facing up to the tough market conditions more than other carmakers, including Volkswagen and Fiat.
"It seems that so far in April and May production (in western Europe) is down only one percent while car sales declined by six percent and this tells us either that exports are growing to make up the difference or that manufacturers have built up inventories," said one bank in a research note.
"This could mean significant production cuts in coming months, expecially if demand remains week...this spread of production and sales concerns all major mass market manufacturers," it added.