Ford Searches For Solutions to Avoid Closing Plants in Europe image

Ford tries to find a solution to fix the factory over-capacity avoiding to close any plant in the money-losing European market.

“There are lots of ways to tackle over-capacity without shutting a factory,” says John Fleming, the automaker’s executive vice president in charge of global manufacturing and labor affairs.

Because of lower-cost plants in Eastern Europe and Asia, Western Europe has become an expensive and inefficient place to manufacture cars, and auto makers are already confronting with more assembly capacity than needed in this region. Although many companies chose to close plants in North America over the last few decades, doing this in Europe will only be a money and time-consuming affair.

Therefore Ford looks for other possibilities than just closing plants. Even if the European market is going down, the auto industry is still growing globally, and this gives Ford opportunities to go forward. In the first half of 2012 Ford lost $553 million in Europe, but saw its profit going up in most of its markets.

“We’re a growth industry,” Fleming told the Management Briefing Seminars. “Even with the current issues, the outlook is that this industry is going to grow two-fold and double in its size been 2000 and 2020.”