October 23, 2012 / 5:03 PM / 8 years ago

Ford summons Genk unions, fuelling closure fears

BRUSSELS/PARIS (Reuters) - Ford (F.N) called an emergency meeting with unions at its assembly plant in Genk, Belgium, amid mounting expectations that the U.S. automaker is preparing to close the factory.

Ford summoned staff representatives to a meeting with European executives at 0700 GMT on Wednesday without providing an agenda, officials from three unions said on Monday.

“No one is allowed to tell us anything,” said an official with the ABVV Metaal union. “We’re assuming it will be a very serious announcement.”

A Ford spokesman declined to comment on the meeting or its purpose. “We will not comment on discussions with our unions,” he said.

The plant in Genk, eastern Belgium, employs 4,300 workers to assemble the Mondeo mid-size car and Galaxy and S-MAX minivans. All three models are approaching the end of their current life cycles.

Pressure for European plant closures has been growing as the region’s protracted auto-market slump racks up ever deeper losses from idled sites. Ford doubled its European loss forecast to $1 billion in July and said action was needed to “decrease our production to match real demand”.

Ford is due to present third-quarter financial results to investors and reporters on October 30.

Unions in Genk had said last month they were more optimistic about the plant’s future after Ford set a date to start production of the new Mondeo next October.

According to sources with knowledge of production plans, however, Ford is prepared to wind down the facility and build the Mondeo elsewhere. The tentative start date is not a reprieve for Genk, said the sources, who asked not to be identified because the plans were confidential.

Genk’s closure, if confirmed, would be Belgium’s second car factory decommissioning in two years, after General Motors (GM.N) scrapped its Antwerp site in 2010. It would leave the country with two assembly plants, Volvo’s in Ghent and Volkswagen’s (VOWG_p.DE) Audi facility in Brussels.

The scale of Ford’s European losses has fuelled speculation that it will join PSA Peugeot Citroen (PEUP.PA) and Opel in announcing a major plant closure.

Paris-based Peugeot unveiled plans in July to cut 8,000 additional jobs and close a domestic plant in Aulnay, near the French capital. Opel is in talks with unions on a restructuring plan leading to the eventual closure of its factory in Bochum, Germany.

In a recent research note, New York-based UBS analyst Colin Langan predicted that Ford would move to close a major plant in Europe, where its factories are running at 52 percent of maximum output on average this year.

“Ford is most likely to close its assembly plant in Genk,” Langan said, citing the factory’s “consistently low utilization level”.

Shuttering the Belgian factory would cost an estimated $1.1 billion and generate annual savings of $730 million, Langan also said.

(Additional reporting by Andreas Cremer in Berlin; Editing by Christian Plumb)

This storuy corrects to "$1.1 billion", from "$1.1 billion euros" in last paragraph of October 22 story.

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