Ford Cuts Workdays in Europe image

Ford declared that the size of its manufacturing base in Europe depends on how long the recession lasts there.

In 2011 Ford’s industry-wide auto sales in Europe totaled 13.6 million units in 30 countries, lower than 19 million reached in 2007 and lower than the normal figure of 17 million, which Ford’s CEO, Stephen Odell, doesn’t expect to be reached in the next four or five years. The company’s strategy relies on taking out more working days and focus on new models to spur sales.

“It’s my job to be profitable at whatever level the market is at,” Stephen Odell, CEO of Ford of Europe said in an interview in London. “We’re taking out temporary workers and cutting hours, and we’ll continue to do that. In terms of capacity, we will watch it. We’ve been pretty proactive in the past and we’ll have to take a long-term view of how long the industry bumps along at 14 million units.”

Overall European car sales fell 6.6% to 1.5 million in March, and Ford declared that its first quarter net income fell 45% to $1.4 billion. Ford decided to cut some working days from its plants in Cologne, Germany and Valencia, Spain and has also curbed daily output at a second German site in Saarlouis. The company expects second-quarter European production to reach 65,000 units, down 15% compared to last year.

Demand in Europe is crimped by the sovereign-debt crisis and austerity measures and Odell believes that the full impact of government spending cuts probably hasn’t been felt yet. The company has factories in Belgium, France, Romania, Russia, Turkey and Britain.