Fiesta production will come to an end at Dagenham.
LONDON - After deciding to close the only car assembly plant in its largest European market - at Dagenham in the UK - Ford of Europe wants its remaining car plants to become more flexible.
Ford plans nine product introductions each year for the next five years. Its factories must be flexible enough to handle all these introductions quickly and efficiently.
'We require plants that are capable of manufacturing this car today and another car tomorrow,' said Ford of Europe Chairman Nick Scheele. 'Dagenham doesn't have that flexibility.'
A primary reason why Dagenham was chosen for closure was that it would have been too expensive to convert so that it could make more than just the Fiesta supermini, Scheele said.
Ford now has only one factory in Europe that can build more than one model. Valencia, Spain, Ford's lowest-cost factory in Europe, builds both the lower-medium Focus and Ka mini.
Ford of Europe President David Thursfield said one additional factory will be named a 'flex plant,' capable of making vehicles on either the B-platform (Fiesta) or the C-platform (Focus).
Genk, Belgium, which makes the upper-medium Mondeo, will continue making only that model. So it is likely Ford will choose one of two German plants - Saarlouis or Cologne - as a 'flex plant.' Both plants may eventually have that capability.
In 1999, Ford said it had capacity to make 2.2 million vehicles in Europe. But it sold only 1.65 million. That situation, and Ford's dismal $28 million net income on sales of $30 billion, was 'totally unacceptable,' Scheele said.
Ford has seen its European market share slide from 11.7 percent in 1995 to 9 percent in 1999.
Ford's believes the restructuring will reduce its costs in Europe by
A1 billion annually.
Dagenham will lose 1,900 jobs via voluntary layoffs as the car assembly line closes in 2002. Those losses will be partially offset by the 500 new jobs created as Dagenham becomes Ford's global center of excellence for diesel engines. Ford will add 80,000-100,000 engines annually to Dagenham production and invest A500 million in the facility over the next five years.
The six- and eight-cylinder engines will go in Ford products, Jaguars and Volvos. The Ford Mondeo will get a common-rail diesel engine in the first quarter of in the first quarter of 2001, Thursfield said. Sources say Ford is likely to introduce a common-rail engine in Focus even before that.
Other elements of the restructuring include:
Relocation of 240 diesel engine engineers to Dagenham
Joint venture with the transmission maker Getrag to operate Ford's three manual transmission factories (see accompanying story)
Seeking a joint venture to develop the forge and foundry operations in Cologne (see accompanying story)
A A26 million investment to upgrade the Dagenham press shop and A10 million for the wheel plant
Rebalancing of engine capacity between Cologne, Valencia and Bridgend, Wales
Ending production by July at the Obchuk, Belarus, joint assembly plant, where Ford makes the Escort and Transit
A A15 million investment in a new advanced design center in London (see story on Page 12)
Moving the commercial vehicle engineering center from Dearborn, Michigan, USA, to Dunton, England, along with nearly 400 jobs. The US center is primarily responsible for designing the Transit commercial van, which is not sold in the USA. Development operations were moved to Dearborn in 1995 as part of the Ford 2000 global reorganization. Ford hopes Transit will eventually be sold in North America.