Ford believe EU trading laws will mean job losses 0

Stephen Odell has been quoted in the press to have said that free trade deals with Asian economies will cause job losses here in Europe.

Over the past one year, 450,000 South Korean vehicles have been imported into Europe. This is a stark contrast for the return statistic, as only 75,000 were built here in Europe and exported to Korea. A deal of a similar nature is currently being negotiated with Japan. Mr Odell believes that this type of deal, with such a poor return will cost many their jobs and in general have a negative effect on Europe’s car industry.

Over capacity in both regions

Over capacity in the European region has been a major problem for years. It has forced the likes of mass car producers Vauxhall and Opel to lose out on profits. Demand has not met the amount of cars being produced in recent times. The same can be said for the Japanese car economy, with the Tsumani and Earthquake in Asian regions last year having a devastating effect on the car industry.

He said “Japan has over-capacity at the moment of more than two million vehicles. You add that to an overstretched, over-capacitised Europe – it can only lead to job losses. If you add that into the pot with a 14 million vehicle industry, over time I think something has to happen”.

According to Mr Odell, Europe has the potential to create up to 20 million vehicles, which is a long way off the current demand. This has led to talks of potential factory closures, including the likes of the Vauxhall Ellesmere plant, based in Cheshire.

Fairer trade

Mr Odell continued to say how circumstances needed to be made fairer. He said “Ford are an advocate of free trade, but it has to be balanced and fair free trade. Europe needs to build things. It needs to engineer things – it needs to employ and train people. It cannot therefore surrender, particularly in unfair, unbalanced trade agreements, its industry.”

General Motors lost more than half a billion dollars last year on the European car market. Ford recently announced that they had made a first quarter profit. However this figure would have been a lot more without Ford’s losses in Europe, which hit a total of £92 million. Consumer confidence in cars has decreased dramatically following the Euro Zone crisis.

When will we report positive news on the European car industry?