Ford fails to allay Belgian plant closure worries

BRUSSELS, Sept 14 Fri Sep 14, 2012 7:57am EDT

BRUSSELS, Sept 14 (Reuters) - Ford has refused to give unions assurances about the future of the U.S. automaker's Genk plant, deepening concern among workers that the Belgian factory may be next in line for closure.

Union officials met managers on Thursday as Ford and other carmakers prepare measures to tackle excess production capacity that has swollen with Europe's five-year market slump.

"We asked about the rumours (of plant closure)," ACV union official Luc Prenen said after the meeting with Ford of Europe chief Stephen Odell.

"They said they could neither confirm nor deny them."

Ford employs more than 4,000 workers in Genk to assemble the Mondeo sedan alongside the S-Max and Galaxy people-movers. The company doubled its 2012 European loss forecast to $1 billion in July and said action was needed to "decrease our production to match real demand."

But chief executive Alan Mulally and other executives have remained tight-lipped about whether that would mean factory closures or other permanent capacity cuts.

"It could do," Odell said last week, when asked the same question during an interview in Amsterdam. "As I have said, we are looking at all elements of the business, including cost."

Ford had no comment on possible cuts, a spokesman said. "It's too soon to provide any specifics about our plan for Europe."

Paris-based PSA Peugeot Citroen is closing a domestic plant and cutting more than 10,000 jobs, and peers including Fiat and General Motors' Opel division are preparing to reduce capacity.

Ford's European registrations have slumped 11 percent this year through July, outpacing the market's 7 percent contraction overall.

In a bid to halt the decline in sales and market share, Mulally is rolling out new European models including an updated Mondeo, a refreshed Fiesta mini and the EcoSport compact SUV.

The updated Mondeo will share its underlying architecture with the U.S. Fusion model - theoretically opening the way for some of the cars to be assembled elsewhere for Europe.

Suppliers have already been warned of a delay to the new Mondeo. Genk unions were told on Thursday that assembly was currently scheduled for October 2013, six months later than planned.

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