Ford set to axe British plant after dire sales in eurozone

After closure of Belgian plant, Transit van site in Southampton awaits fate
  • @BawdenTom

Ford is expected to announce the closure of its Southampton van factory today, with the loss of more than 500 jobs, as the US car giant overhauls its European operations.

Ford sent shockwaves through Europe's car industry yesterday, after it said it would shut its "underutilised" 48-year-old Genk plant in Belgium by 2014, with the loss of 4,300 jobs, as the first part of a far-reaching restructuring programme.

The car maker also summoned British shop stewards to an emergency meeting at its Basildon headquarters at 10am today in a move that fuelled speculation that the axe is also set to fall in the UK.

The Swaythling factory on the outskirts of Southampton, which has built more than 2.2 million Ford Transit vans since 1972, is thought to be the victim, and could potentially cease production as early as next year. The plant, which once employed thousands, now employs 530 staff.

Belgian trade union leaders were told of the Genk plant's closure at a meeting yesterday morning before Ford announced the move, a pattern that Caroline Nokes, MP for Romsey and Southampton North, expects to be repeated in her constituency today. "I've always had concerns about the factory and it now looks like there will be an announcement tomorrow indicating that it's going to close," Ms Nokes said.

In a statement that did nothing to quell speculation, a Ford spokesman said: "We are reviewing all areas of the business to address the near-term challenges while ensuring a strong business for the future.

"We will communicate with all stakeholders at the appropriate time," he added, ahead of a teleconference this afternoon at which the chief executive, Alan Mulally, will provide more details of the overhaul.

Ford refused to discuss plans for its UK operations, where the company employs 11,400 at sites including Dagenham, in Essex; Halewood on Merseyside and Bridgend in South Wales, as well as Southampton, ahead of today's meetings.

Ford's European restructuring underlines just how weak demand for cars has become as the eurozone crisis refuses to subside. Gent is the first assembly plant Ford has closed in Europe for 10 years. The announcement comes after the company warned it will lose about $1bn (£600m) on the Continent this year after a 20 per cent drop in total industry vehicle demand in the region since 2007.

It is the third European plant closure to be announced by a major car maker this year, after PSA Peugeot Citroë*'s Aulnay site near Paris and General Motors' Opel factory in Bochum, Germany.

Production of Ford's Mondeo, S-Max and Galaxy vehicles, presently carried out in Genk, will move to Valencia in Spain following the plant's closure.

Car demand across Europe is at a 20-year low, with forecasts it will remain below pre-crisis levels until at least 2017. In a further development, Peugeot Citroë* said it was close to agreement with creditor banks on €11.5bn (£9.3bn) of financing, and had won state guarantees on €7bn in further borrowing for its finance arm.