Ford motor announced another round of job cuts in Europe as well as plant closures Thursday as a way to stop regional losses that the auto manufacturer expects to be above $3 billion in the next two years. The company told British unions that it would close its Southampton van factory and a connected stamping plant in Dagenham in mid-2013. It would result to the slashing of 1,400 jobs and end vehicle manufacturing by Ford in the country.
The action came a day after Ford announced that it would shut down a car plant in Genk, Belgium in 2014. Ford slashed 6,200 jobs and decreased European production capacity by 18 percent. It would result to savings of $450 million to $500 million a year.
Ford said that it expects losses of up to $1.5 billion in Europe this year. This was up from the previous estimate of $1 billion. The company expects similar loss in 2013, when European car sales are predicted to be the same level as this year’s numbers.
Market recovery is nowhere in sight in Europe as car manufacturers struggled to close down underused factories and slash excess jobs that resulted in losses in the region. The Southampton plant was the fourth European vehicle plant closure announced this year. Employees at Ford’s British plants were devastated by the announcement.
It was the second time this year that Ford tried to improve its estimated loss for Europe. In 2011, Ford reported that it lost $27 million in the region. Earlier this year, Ford estimated a loss of up to $600 million in Europe.
But in July, the estimate went up to $1 billion. Now Ford said that it would lose at least $3 billion this year and the next one. Vehicle sales in Europe would be below 14 million units.
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