World and Nation

Ford closing three plants in European downsizing

The Ford Motor Co. has broken from the pack of troubled European automakers, announcing deep cuts that include shutting three factories in the region and eliminating 5,700 jobs.

The auto industry has been in decline in Europe, where sales have fallen to nearly a 20-year low and production capacity far outstrips current demand.

By acting forcefully to address its problems there, Ford is setting a bold example for the rest of the industry, analysts said. Other companies will face pressure to make similar moves or explain to investors why they are continuing to employ too many workers at underused factories.

Ford is following the same blueprint to downsize in Europe that it used to turn around its North American business several years ago.

The company said Thursday that it expected to lose more than $1.5 billion in Europe this year, up from an earlier estimate of at least $1 billion. Ford said the cuts would save about $500 million in annual costs and help it return to profitability in the region by mid-decade.

Ford’s chief executive, Alan R. Mulally, said the automaker was working with its unions in Belgium and Britain to assist workers affected by the factory closings.

“We recognize the impact our actions will have on many employees and their families in Europe, and we will work together with all stakeholders during this necessary transformation of our business,” he said in a conference call with analysts and reporters.

Ford had said Wednesday that it would close its assembly plant in Genk, Belgium, by the end of 2014. On Thursday, it said it would also close two plants in Southampton and Dagenham in Britain next year.

The actions will reduce production capacity in Europe by 18 percent, or 355,000 vehicles. The company said it would eliminate 4,300 positions in Belgium and 1,400 in Britain.

The moves contrast with those of other automakers that have either avoided plant closings altogether or scheduled shutdowns for several years from now.

One industry analyst said other auto companies in Europe could follow Ford’s lead and step up their restructuring efforts.

“There is something to be said for swallowing all of the bad medicine at one time,” said Michael Robinet, managing director of IHS Automotive Consulting in Northville, Mich. “I think other manufacturers have to acknowledge a real sense of urgency now.” European auto sales have fallen to a projected 14 million vehicles this year, down from about 18 million in 2008. Ford’s European chief, Stephen Odell, said the market may drop even further next year, making production adjustments essential for a long-term turnaround on the Continent.