Ford said to plan to shut last vehicle-making factory in UK
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(Bloomberg) -- Ford Motor Co. intends to close its van plant in Southampton, England, its last vehicle-making factory in the UK, said two people familiar with the automaker's plans.
The factory, which employs 534 workers, will probably close when Ford ceases production of the current version of the Transit commercial van as early as next year, said the people, who asked not to be identified revealing internal plans.
Southampton produces Transit chassis cabs that can be customized into various commercial vehicles.
The factory built fewer than 30,000 Transits last year, while "about 200,000 is the industry standard for an efficient plant," said Brian Johnson, a Chicago-based analyst at Barclays. The carmaker's other European sites have capacity to make 230,000 vehicles a year, so Southampton is "clearly subscale from that standpoint."
Ford's Turkish joint venture with Koc Holding would probably be the beneficiary of the Southampton plant's shutdown, according to Barclays analyst Johnson. The Ford Otosan business has capacity to manufacture 320,000 Transits, following an expansion of capacity this year, while it's only likely to make 250,000 of the vans by year-end, he said.
Stephen Odell, head of Ford's European operations, is scheduled to meet employee representatives from all its U.K. factories on Thursday at the carmaker's research center in Dunton, England, though no topic has been specified, said Roger Maddison, a leader of the Unite union.
Ford also has an engine plant in Bridgend, Wales, with 970 workers, and stamping and engine manufacturing facilities in Dagenham, with 2,970 employees. A joint venture with the Getrag Group in the Liverpool, England, suburb of Halewood produces transmissions and employs 720 people.
Ford has been making cars in Britain since 1911. The carmaker's last auto-factory shutdown in Europe was a plant in Dagenham, England, in 2002 that made the Fiesta compact, a move that cut 2,000 jobs.
Southampton's closing may precede the 2014 shutdown of Ford's car and van plant in Genk, Belgium, which the automaker announced on Wednesday.
Ford's vehicle factories in Europe are operating at 63 percent of capacity, according to Morgan Stanley. Southampton last year built fewer than 30,000 vehicles, using less than one-third of its capacity, according to IHS Automotive.
"It's brave and it's decisive," Adam Jonas, an analyst with Morgan Stanley, said of the automaker's plant closures in Europe. "It shows the confidence of the leadership of the company to get it done while there's a crisis going."
Ford has said it will lose more than $1 billion in Europe this year as car sales fall to near a 20-year low. The sovereign debt in Europe has sapped consumer confidence.
Ford's European sales have dropped 12 percent this year, outpacing the market's 7.2 percent fall.
"We will make any further announcements at the appropriate time once the relevant stakeholders have been informed," John Gardiner, a spokesman at Ford's European headquarters in Cologne, Germany, said. "Going forward, we will continue to assess the economic situation and all areas of our business and take appropriate action."
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