The employees of General Motors and Ford Motor Co. in Europe approved labor-cost reductions to boost earnings in the region amid a recession that’s trimming down vehicle sales. In a statement, Ford said that production workers at its Genk, Belgium plant and its suppliers will put a stop to walkouts after agreeing to severance packages of up to 2 1/2 years of pay when the factory is closed in 2014.
In a separate statement, the IG Metall union said that a pay freeze at GM’s Opel brand in Germany had the support of workers at three of the five plants operated by the unit.
Auto sales in Europe are expected to decline for the sixth straight year in 2013 after having reached its lowest level in 17 years in 2012 as the region struggles to survive the sovereign-debt crisis. Ford is laying off 4,300 jobs at Genk as part of a combined 30,000-job reduction outlined since mid-2012 by auto manufacturers like PSA Peugeot Citroen, Renault SA and Opel.
Philippe Verbeeck, Ford’s operations manager at this plant, said that the company is “pleased” to have entered a social plan agreement that the unions accepted and was approved by the Genk’s hourly employees.
He also said that everyone recognizes how difficult this time is for the Ford Genk plant, its suppliers and the local community. Because of labor disputes and the workers’ strikes, production at the plant in Belgium has stopped. Last October, Ford revealed plans to shut down the site and two plants in the UK.