Ford struggling to solve its factory over-capacity issues in Europe

Article by Christian Andrei, on August 8, 2012

Ford Motor Co. is hoping to avoid shutting down a plant as it looks for other ways to resolve its factory over-capacity issues in Europe. John Fleming, Ford’s executive vice president in charge of global manufacturing and labor affairs, said that there are plenty of ways to handle over-capacity without closing a plant. Fleming said that Ford is studying alternatives to decreasing its production capacity.

However, he didn’t give a time frame for the implementation of this plan. He said that it will be enacted as soon as possible. He talked to reporters after the 2012 Management Briefing Seminars. Many companies have complained about the new-car market in Europe and its over-capacity. He said that as a result, Ford’s profit margins have been affected.

Ford recorded a $553 million pre-tax loss in Europe in the first half of 2012 compared with a $469 million pre-tax gain for the same period in 2011. One problem with this plan is that Ford would be in a worldwide expansion mode otherwise. At the same time, it wants its plants across the world to be on more efficient 3-shift work schedules, which would lead to higher capacity. Fleming added that Ford is about to launch or start building nine new auto plants around the world. [source: Automotive News - sub. required]

Topics: ford, europe

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