Analysts draw attention on Ford’s ‘restructuring plan’ for its troubled European operations.
Recently the automaker announced it is working on a ‘restructuring plan’ for the European market, which includes a plant closure here, possibly one of the two facilities in Genk, Belgium, where the company manufactures the Mondeo, Galaxy and S-Max. The first Genk plant reached its peak in 2001 with 330,000 Mondeo produced, while plant no.2 reached its peak in 2007 with 102,000 units. In 2011 the first plant produced 98,000 Mondeos, while No. 2 manufactured only 80,000 units.
Analysts from Credit Suisse begin to wonder what was the real cause for the 6-month delay in the launch of the new Mondeo. The automaker cited quality and production issues, when the real reason was the shrinking European market, which reached the lowest level in 17 years. This means that Ford’s output is in danger of decreasing below critical mass in Europe.
Ford is currently in a difficult situation trying to find solution to diminish excess production in Europe, where it expects a loss of over $1 billion this year due to the economic crisis and implicitly decreased sales. The Genk factory in Belgium, manufactures the S-Max minivan, the Galaxy minivan and the Mondeo midsized car. If the automaker decides to close a plant in Europe, this one would be a potential candidate.
Analysts also predict that Ford might decide to transfer production of the Galaxy and S-Max at its plant in Valencia and since Ford already manufactures the Fusion, Mondeo’s sister car, in Mexico, it could be highly possible to begin manufacturing the Mondeo in this market too.