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Ford warns of further European cutbacks

Date: November 08 2012


Ford, which plans to close three factories and scrap 6200 jobs in Europe in an attempt to stem losses, said it cannot rule out further capacity cuts in the region if the car market deteriorates further.

While Ford has no current plans for further capacity cuts - which can range from dropping a factory shift to closing a plant - the carmaker is monitoring Europe's market and economic outlook very closely, chief executive Alan Mulally said.

"That will determine what we do - if we do anything more," Mr Mulally said at a conference in Berlin. "The most important thing is to match our production to the level of demand." About 170 protesters burned tyres and threw fireworks at police officers outside a Ford plant in Cologne during a meeting between management and Ford's European Works Council.

The protest comes about two weeks after Ford outlined its restructuring plans for Europe, where the company's losses could surpass $3 billion over the next two years.

A group of protesters in Cologne, where Ford of Europe is based, stormed the Ford factory grounds, smashing windows and injuring a Ford employee, police said. Six people were arrested and three police officers were injured.

Ford said in a statement, "While we understand the impact that our European business transformation plan has on people and respect their right to peaceful demonstrations, we are disappointed that some of the protesters used force to gain entry to our facilities in Cologne." The situation in Europe remains "very volatile," Mr Mulally said in Berlin. "We don't know whether it will stabilise or hit bottom or not because it's continuing to decrease." The second-largest US. carmaker said last month it will shutter a British van factory in Southampton and an associated stamping plant in 2013, and close a bigger site in Genk, Belgium, the following year.

The European cutbacks by Ford are expected to generate savings of $US500 million ($480 million) annually by 2015. The automaker aims to make a profit in the region around that time.

Ford, which posted a $US468 million European loss in the third quarter, expects to lose a combined $US3 billion in the region in 2012 and 2013.

"We needed to move decisively, also to be able to invest in new products," Mr Mulally said. "If you don't do that, you continue to lose money and will be gone." Ford rival General Motors, which is forging an alliance with struggling French automaker PSA Peugeot Citroen , remains mired in talks with Germany's IG Metall labor union over plans to cut jobs at its Opel division and close a plant in Germany in 2017.

Reuters

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