BRUSSELS: Ford Motor Co. will close a car plant in eastern Belgium - one of its main European factories, by the end of 2014, a move that will result in 4,500 direct job losses and 5,000 more among subcontractors.
Exactly half a century after construction on the Genk plant started, Ford told a management council there that production was winding down since slumping European sales has forced a restructuring of its plants.
''This is taking us by surprise and is an extremely bitter pill,'' Christian Democrat union representative Johan Lamers told The Associated Press.
Ford has been under pressure in Europe due to the region's dwindling demand for its models and the overall slide of car sales on the continent due to the debt crisis. The company expects to lose more than $1 billion this year in Europe, where it gets a quarter of its sales. Analysts say Ford has more factory capacity than it needs. The plant in Genk makes the midsize Mondeo, the S-MAX minivan and the Galaxy car.
Ford said it plans to move the production of all three lines to Valencia, Spain. ''The proposed restructuring of our European manufacturing operations is a fundamental part of our plan to strengthen Ford's business in Europe,'' CEO Ford of Europe Stephen Odell said in a statement.
Ford has been struggling in Europe. Figures from Acea, the European carmakers' association, show European market sales have dropped 10.8 per cent on a year-by-year basis in September. Ford's drop in sales was 14.9 per cent, however. Ford's European management was expected to meet with Belgian Prime Minister Elio Di Rupo and regional Flemish authorities later Wednesday.
The announcement came barely a month after Ford had given reassurances about production at the Genk plant, Lamers said. Ford Genk represents more than 30 per cent of the car production in Belgium. Workers took the announcement early Wednesday with relative calm. A bonfire was set up at the gate of the plant but there was little union action since the factory was in the middle of a three-week layoff because of slack demand.