Ford closes Belgian plant s Europe's auto crisis spreads

US auto giant Ford announced on Wednesday the imminent closure of its plant in Belgium's northeastern Genk, threatening the loss of 4,300 jobs as the drop in demand for cars across Europe slows production. With Ford Genk the leading local employer, workers variously raged and wept as news of the imminent closure fell at an extraordinary works committee meeting. "It's a nightmare, a catastrophe for Genk and for the region," said town mayor Wim Dries as TV and radio networks dubbed it "a bitter pill" and "sharp blow" for Belgium. Ford Europe said in a statement issued in Frankfurt that the closure by the end of 2014, with the loss of about 4,300 jobs, was part of an overall shake-up of its European operations in the face of falling demand -- currently at a 20-year low. The plan will "help to address manufacturing overcapacity stemming from a more-than-20-percent drop in total industry vehicle demand in western Europe since 2007," Ford explained. Assembly of Ford's Mondeo, S-Max and Galaxy models would be transferred from Genk to Valencia in Spain, the firm said. Because the current model of Mondeo was assembled in Genk, trade unions had thought the plant had won a respite of several years when Ford last month announced the launch of production of the new Mondeo in October 2013. Ford's Europe managers were due to meet later Tuesday with Prime Minister Elio Di Rupo and the head of the northern Flanders government Kris Peeters. Fifteen years after the close of Renault Vilvorde, near Brussels, and two years after that of Opel, the European arm of US giant General Motors, in the northern city of Antwerp, Genk's closure marks a new low for a once important industry. The Flemish business leader's association Volka called on the government to reduce the price of labour. "To compete with foreign competitors, labour costs paid by companies must be drastically cut," said Volka administrator Jo Libeer. Ford Genk is the main employer in the Flemish region of Limbourg near the Dutch border and, when taking into account subcontractors, provides work for some 10,500 people. "We understand the impact this potential action would have on our workforce in Genk, their families, our suppliers and the local communities," Ford Europe Chief Executive Stephen Odell said. "We fully recognize and accept our social responsibilities in this difficult situation and, if the restructuring plan is confirmed, we will ensure that we put in place measures and support to lessen the impact for all employees affected," he said. Pending further study, Ford may decide to move production of the C-MAX and Grand C-MAX compact multi-purpose vehicles from Valencia to Saarlouis, Germany, in 2014, where the car industry is faring better than in Belgium or France.