Ford to shut Southampton Transit plant

BroadyFord · 26-10-2012, 12:45 AM

Sad...

Ford's Southampton Transit factory closure 'devastating'

http://www.bbc.co.uk/news/uk-england-hampshire-20078143

Workers have been left "shocked and angry" by Ford's announcement to close its Transit factory in Southampton with the loss of 500 jobs, a union has said.

The Hampshire plant, where Transit vans have been made for 40 years, will shut in July 2013 - Ford's last vehicle manufacturing site in the UK.

It is understood staff will be offered a redundancy package or redeployment.

It has also been confirmed the car maker will shut its Dagenham plant in Essex with about 750 jobs going.

Workers in Southampton were sent home for the day after hearing the news.

'Disappointment and shock'
The Swaything plant, which makes the Transit van, is the last Ford vehicle assembly plant in the UK.

Justin Bowden, from the GMB union, said: "There will be a feeling of shock and anger.

"This is devastating news for the workers in Southampton and Dagenham and is very bad news for UK manufacturing."

Employee Mohammed Shafiq, 58, from Southampton, has worked at the plant for 38 years.

He said: "People are very shocked and management said if you are shocked you can leave work early.

"This is very important for Southampton which needs more industry."

Fellow local worker Simon Spicer, 40, said: "It's a disappointment and a shock but I suppose it was something that was going to happen because they had talked about closing.

"My dad worked here in 1972 for 25 years. I've worked here for 25 years, I'm not sure what I'll do."

The US car making firm is restructuring across Europe and announced on Wednesday its Belgian plant in Genk would also shut with the loss of 4,300 jobs.

Made Spitfires
The closure of Southampton's factory will end more than 100 years of vehicle production by the company in Britain.

About 2.2 million Transits have been made in Southampton since 1972 and it has been dubbed "the home of the Transit".

The factory was used to make Spitfires during World War II and was targeted by German bombers.

In 2009, the firm halved its workforce at Southampton to 500 with some production moving to Turkey.

Former worker Bill Chandler took redundancy in 2008 after 32 years with the company.

He said: "It's extremely bad news, especially for those who have young families.

"How are they going to manage? Is Ford going to keep up their commitment to keep their pensions going and are they going to ensure these workers are being looked after?

"The production in that place goes back a very long time. In fact a lot of us are very proud we actually used to work with people who built the first Spitfires there."

'Workhorse of Britain'
John Denham, Labour MP for Southampton Itchen, said workers had been "let down".

He said: "For years the Southampton-built Transit has been the workhorse of British business. White van man drives a Transit.

"Now white van man will only be able to buy a Transit from Turkey."

Mr Denham said he would be asking ministers what they had done to try and make Ford change its mind.

He also called on the government and local councils to set up a taskforce to help those who would lose their jobs.

Leader of Southampton City Council, Richard Williams, said: "It's an absolute kick in the teeth, there's no question about that.

"We're having to run as fast as we can to try and respond to it."

Sally Lynskey, chief executive of Business Solent, said: "It will undoubtedly be a major blow for the local economy.

"[It will] also have a serious knock-on effect for the local companies in the supply chain."

Buntz · 26-10-2012, 01:17 AM

Wow. That's just awful. People losing their jobs, and the heritage of that place.

It makes us really lucky to still have Ford producing here right now. Ford is just axing plants across Europe, and our Ford plant still has a committed future.

Still, our local Journalists won't be happy until Ford does the same to Broadmedows. They will keep telling people they are shutting down though. You'd never get that in those places I bet.

Brazen · 26-10-2012, 09:52 AM

Big blow, surprised in a way as the new Transit will be a big success, but I suppose it is a sign of the troubles in Europe.

Pepscobra · 26-10-2012, 10:06 AM

Very sad to hear that there'll be no more local manufacturing in the UK.

jpd80 · 26-10-2012, 10:14 AM

Quote:

Ford Motor Co. expects to lose $1.5 billion in Europe this year, reducing its capacity on the continent by nearly 20 percent and expects to save nearly half a billion dollars annually by closing three plants, the company confirmed Thursday.

"While we are facing near-term challenges in Europe, we are fully committed to transforming our European business by moving decisively to match production to demand, improve revenue through new products and a stronger brand, improve our cost efficiencies and take advantage of opportunities to profitably grow our business," said Ford CEO Alan Mulally.

In all, Ford will cut about 6,200 hourly and salary employees and will shift production of vehicles from Genk and Southampton to other European assembly plants, saving about $450 to $500 million annually, the company projects.

"It does feel like we're running at a really low level, and even saying that, next year's industry could fall below the levels we're seeing this year," said Stephen Odell, CEO of Ford of Europe of the European economic situation. "It was our view that the correct thing to do was to close the (Genk) plant in 2014."

Ford had been under pressure from investors to curb steep losses in Europe. Previously Ford had estimated it would lose about $1 billion; it now says it will lose $1.5 billion and expects a similar outlook for 2013.

Some analysts were "impressed" with Ford's European restructuring plan. Citi Investment Research raised its guidance on Ford after the automaker said earnings per share and pre-tax profits would be higher during the third quarter than in the second quarter.

The automaker will also report its preliminary third-quarter earnings Tuesday.

Jefferies & Co. Inc. said Ford's moves will increase its capacity utilization in Europe to nearly 90 percent; Ford had been running at about half maximum capacity. Odell said should the European market rebound, Ford would still have the flexibility to increase production or imports.

"Certainly in the near term we believe we have very adequate capacity," he said. "We also will have flexibility to import to Europe," he said, noting future imports to Europe like the Ford Mustang.

The cost of closing plants, such as Genk by the end of 2014, will likely top $1 billion, analysts project, but Ford estimates it will return to profitability in Europe by mid-decade. Ford did not give an estimate of the average cost to lay off or buy out 6,200 workers, other than to say it would be north of $100,000 per worker.

Congruent to Ford's restructuring plan, the automaker will introduce 15 global vehicles in Europe over five years.

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz2AM5r24qS

To lay off or buy out 6,200 workers is going to cost Ford at least $620 million.
A lot of the workers at Genk are long term employees over 40 years old...

Joe5619 · 26-10-2012, 10:17 AM

Very sad... All those workers lossing jobs.

:(

Fiesta God · 26-10-2012, 11:13 AM

Unfortunately it's a sign of how poorly the European economy is performing, and the British economy in particular.

Europe is in the doldrums, I heard a presentation by a former economic advisor to the EU a few months ago, his prediction was that it would be 10 years before Europe recovers enough to be attractive to business investment.

This won't be the last of Ford's closures, they were the most invested in Europe of any of the non-Euro car manufacturers.

It's unfortunate as the Euro-built Fords are IMO the best vehicles they make. However it sounds like they intend to protect their design and engineering capacity, which is good news - it's just the assembly and production capabilities that are being affected.

Have to feel for the workers. But you can't blame Ford - they have an obligation to run a profitable business.

jpd80 · 26-10-2012, 11:20 AM

Just to point out that Genk was putting out over 270,000 vehicles back in 2007 but that has fallen to around 90,000 up to September this year
Mid sized cars have taken a hammering over increased fuel prices and carbon taxes imposed in Europe, fleets have moved to greener vehicles.

Cutting Genk's capacity and transferring production to Valencia and relocating the C-Max production to Saarlouis should
take production in plants back to around 90%

sbutler · 26-10-2012, 11:42 AM

England is fast going down the crappa, I have a friend that owns 3 steel fabracation plants over there, been in his family since it started, he has had to shut them down! Its the first time in over 100 years that he had to shut the doors.

mr smith · 26-10-2012, 07:57 PM

Quote:

Originally Posted by sbutler

England is fast going down the crappa, I have a friend that owns 3 steel fabracation plants over there, been in his family since it started, he has had to shut them down! Its the first time in over 100 years that he had to shut the doors.

Thats what happens to countries that get ahead of themselves. Greedy bosses and lazy unions = in the poo. Reminds me of somewhere else actually.

It is real sad that the country that started the industrial revolution is being hammered. Manufacturing is the true key to prosperity, it creates the middle class who love consumption, which keeps the wheels turning.

**DJM83** · 26-10-2012, 08:09 PM

Genk, now Dagenham. God the heritage in those plants, such a shame not to mention the folks loosing their jobs.

Nikked · 26-10-2012, 08:32 PM

Wow, there are some big costs involved in a shutdown. Things must be very dire to make those huges losses in a shut down.

jpd80 · 26-10-2012, 08:39 PM

Quote:

Originally Posted by Nikked

Wow, there are some big costs involved in a shutdown. Things must be very dire to make those huges losses in a shut down.

It's going to cost Ford around $1.5 billion to $2 billion to shut down, pay off staff and decommission those three plants.
Ford wont see a penny back on that for years but cutting losses now means the bleeding stops for the second half of the decade.

Hypothetical,
To shutdown FoA production would probably cost the same as a new product cycle for one of the two vehicles with no chance of ever recovering that money....

Buntz · 26-10-2012, 08:42 PM

Things must be very dire indeed. That was a complete out of the blue shutdown notice. No conjecture, talks, or leaks. Just bam.

Ford is acting fast to contain the bleeding. And it's a bloody good thing Alan Mulally is at the helm to see it through, because I don't think anyone could. He's not opposed to making hard choices. But he calculates them, and takes action.

Just so unfortunate for those people. And very fortunate we still have a running plant.

Bossxr8 · 26-10-2012, 10:32 PM

I can't believe Ford won't be making any cars in the UK, they have such a long history there.

Heart goes out to my Ford brothers.

FordFalconBF · 26-10-2012, 10:56 PM

Ford will make all their cars in India/Asia and Africa.. anywhere they can get cheap labour.

Road_Warrior · 26-10-2012, 11:37 PM

There was a whisper about 3 months ago that Southampton was looking dodgy, it surfaced around the same time the issues with Genk blew up. I thought Southampton would be the safer of the two but obviously Ford has decided they are both futureless. I must say, I did find it odd that Genk did all the stamping for Southampton; quite an inefficient way of doing things and now the pieces are coming together as with the closure of Genk, there is no source of panels for Southampton and Ford won't cough the quid to put a stamping plant in Southampton (there's no room for it anyway) so that would have sealed its fate along with the rest of the issues associated with Transit's performance in the marketplace generally.

The heritage of the factories pales in comparison to the human cost of this action. 4500 in Genk plus 500 at Southampton and 750 in Dagenham - gonna be many a bleak Christmas for many households in Belgium and the UK this year. The heritage and history is cold comfort for those people who will struggle to find work in an already depressed economy.

EDIT: Dagenham is where the 2.7TDCi V6 engine for the SZ Territory is made. Closure of this plant will terminate FoA's access to the engine which will cause them problems unless they can determine an upgrade path for the Territory before then - or obtain all the casting moulds and tooling for Geelong Engine to make them.

Road_Warrior · 27-10-2012, 12:09 AM

Looks like I am incorrect about Dagenham Engine. It shouldn't be affected.

Buntz · 27-10-2012, 12:48 AM

Quote:

Originally Posted by Bossxr8

I can't believe Ford won't be making any cars in the UK, they have such a long history there.

Heart goes out to my Ford brothers.

Yeah. They've been making cars there for one hundred years give or take. Longer than Ford's been building cars here.

Quote:

Originally Posted by Road_Warrior

Looks like I am incorrect about Dagenham Engine. It shouldn't be affected.

Few... scared me for a moment there dude.

I was like: "NO DIESEL FOR TERRITORY!!!???!!!"

Road_Warrior · 27-10-2012, 01:00 AM

QFT. Also, I was wrong about Genk and the supply for Southampton. They only supply a small amount of gear for Southampton, Dagenham does most of the stamping for Southampton.

This whole situation is awful, and it is a stark demonstration that Ford is ready and willing to slash it's operations if it wants to, at very short notice. It goes to show that if Broadmeadows was in for this sort of treatment, it would have happened ages ago. Kinda odd though that they didnt try the down balance and cut shifts with Genk first like they did here, before swinging the axe. But then I guess what may have worked well here to keep costs under control may not have worked there.

Fiesta God · 27-10-2012, 10:40 AM

The other thing that helps Australia is that Ford US views "Europe" as a whole - the operations are all part of the same economic/social region. You can see this in the way that design/engineering and engine manufacturing and car assembly are all done in different countries/areas.

Whereas Ford in Australia, whilst being part of Asia-Pacific, is given a different status as it is the only operation in this continent, and we do everything from design to assembly and all the way in between.

Dr Smith · 27-10-2012, 10:51 AM

Quote:

Originally Posted by Road_Warrior

QFT. Also, I was wrong about Genk and the supply for Southampton. They only supply a small amount of gear for Southampton, Dagenham does most of the stamping for Southampton.

This whole situation is awful, and it is a stark demonstration that Ford is ready and willing to slash it's operations if it wants to, at very short notice. It goes to show that if Broadmeadows was in for this sort of treatment, it would have happened ages ago. Kinda odd though that they didnt try the down balance and cut shifts with Genk first like they did here, before swinging the axe. But then I guess what may have worked well here to keep costs under control may not have worked there.

You're right, this shows that if needed Ford can be tough minded when it needs to and sentiment has no place. Campbellfield it seems isn't considered a financial burden in the same manner these euro plants have been. Sadly for the euro workers this seems a real bombshell.

I guess one difference is that there are existing a plants in Europe which can take over and bring their capacity up closer to 90+% thus helping the bottom line. And these plants don't have an R&d engineering centre the way Ford Aust. does. Maybe our isolation is a benefit in this case as which plants in our region can take over Falcon & Terry while they are local only products. Interesting times ahead.

Joe5619 · 27-10-2012, 12:51 PM

Is no one else worried that our plant is only at 25% capacity.. How long will Ford put up with that? I hope they have a plan to get it back up to 90% + & not cut here too.

Bossxr8 · 27-10-2012, 01:10 PM

For sure.

If they don't get access to export markets the place won't be secure, especially if the Australian economy takes a turn. But a lot of that rests on Detroit and wether they even give a *** or not. They are the ones that keep denying FoA export markets and LHD development of Falcon and Territory. Makes you wonder why they keep holding it back. Not invented here, or not made in the US so its no good?

jpd80 · 27-10-2012, 02:00 PM

New Mondeo is now two years away and now badly out of sync with the American Fusion.
Let's hope the delay allows Ford to do more changes to Mondeo that leap frog the US Fusion...

Rodge · 27-10-2012, 02:27 PM

Makes you wonder how many ten's / hundreds ? of millions of company's and families around the world have a ban on non-essential capital expenditure until the GFC is finally over. Cheap and cheerful appears to be the new cool.

Car companies that get ahead of this trend will be the new winners IMO.

jpd80 · 27-10-2012, 02:47 PM

Quote:

Originally Posted by Bossxr8

For sure.

If they don't get access to export markets the place won't be secure, especially if the Australian economy takes a turn. But a lot of that rests on Detroit and wether they even give a *** or not. They are the ones that keep denying FoA export markets and LHD development of Falcon and Territory. Makes you wonder why they keep holding it back. Not invented here, or not made in the US so its no good?

I thought it was FoA saying there's no money in exporting cars to the USA, not Ford NA....

Franco Cozzo · 27-10-2012, 05:55 PM

Quote:

Originally Posted by jpd80

I thought it was FoA saying there's no money in exporting cars to the USA, not Ford NA....

Falcon would be priced way too much for what it is if it sold in the USA.

Bossxr8 · 27-10-2012, 09:28 PM

Quote:

Originally Posted by jpd80

I thought it was FoA saying there's no money in exporting cars to the USA, not Ford NA....

I wasn't talking about exporting to the USA, everyone knows that won't fly. I'm talking throughout Asia and the Middle East.

jpd80 · 27-10-2012, 11:14 PM

Quote:

Originally Posted by Bossxr8

I wasn't talking about exporting to the USA, everyone knows that won't fly. I'm talking throughout Asia and the Middle East.

Taurus and Lincoln MKS is exported to middle East, I doubt the path there is open to FoA...

Asia is a tough nut to crack, will need Falcon and Territory both with V6 diesel and Ecoboost.