Ford Prepared to Make More Cuts in Europe image

Ford announces it will close the Southampton van factory and a stamping facility in Dagenham next year, cutting 1,400 jobs.

The announcement comes a day after Ford said it will close the Genk plant, in Belgium in late 2014. The total number of job cuts would be 6,200, and a decrease of European production capacity of 18%, which means the company will manage to save $450 million to $500 million a year. Ford also announced it expects a loss of more than 3 billion in Europe for 2012 and 2013 put together.

“We are really trying to reflect the reality of the economic slowdown and industry downturn in Europe. That’s why we need to move decisively now,” said CEO Alan Mulally.

This week is the second time Ford increased its estimated loss in the European market, which only shows the rapid deterioration on the continent, where the automaker has already lost $27 million last year. Analyst Matthew Stover said that Ford’s move to close plants will not be enough to deal with the overcapacity in Europe, which outstrips demand by 9 million vehicles. The company said that if auto industry in Europe won’t begin to recover, it is prepared for further actions.