Ford closures, the effect on the UK economy 0

Ford’s closures throughout the UK are sure to affect the automotive industry in a very negative manner. 1,400 jobs are set to go at Ford.

The recent announcement made headlines throughout the UK. Despite Britain overcoming a double dip recession, the news that Ford are certain to cut around 1,400 jobs has brought a sour tone within the automotive industry. 500 jobs are set to go in Southampton and 750 in Dagenham. Voluntary redundancy will be offered by Ford.

A Transit Van factory in Southampton is expected to close at some point next year. Production will then shift over to Turkey. Operations in Dagenham will also be cut down.

Ford rivals General Motors have been losing a lot of money in Europe for the past 12 years and now rivals Ford are in the same boat. Ford has been predicted to lose $1.5 billion in Europe this year, which is $500 million more than originally expected. Clearly something drastic has to be carried out. Losses are so bad that Ford expect to reach a profit only in the middle of the decade.

It is not only the UK to receive such bad news. A major plant in Belgium is also set to close; currently employing 4,300 people which production being transferred to Spain.

Ford will not be exiting the UK. They are too many extents very successful in the UK, where their Fiesta model continues to be the bestselling car year after year. They are also the number one seller of commercial vehicles. Ford has described the UK as a “centre of excellence for their engines”.

Vince Cable, the UK’s business secretary, has said that the news has come as a “blow”. He played an instrumental part in convincing General Motors’ chiefs to keep Vauxhall’s Ellesmere plant in Cheshire open. In order to counter Ford’s news, he has said that the Government’s Regional Growth Fund could help Ford to reinforce their engine development and production.

Alan Mulally has for the first time implemented some tough changes over in Europe. Peugeot Citroen has recently been bailed out by the French Government in a €7 billion deal. The Euro Zone debt crisis is still clearly having a devastating effect on the European car industry.

Let’s hope that there are not too many more job cuts here in the UK.