Ford Will Shutter Factory for 1 Month

VedomostiThe assembly line at Ford's plant near St. Petersburg, which produces 70,000 of the company's Focus models yearly.
U.S. automaker Ford Motor Co. said Monday that it would suspend production at its Russian plant for one month as the global financial crisis slashes demand for cars.

The company said the assembly line would be stopped from Dec. 24 until Jan. 21 because of the New Year's holiday and the need to reduce production volumes in December and January.

"The decision to temporarily cut production volumes at Ford's Russian plant has been made by the company due to the overall market environment and the lowering of forecasts for total Russian car sales," Ford said.

Employees will receive two-thirds of their normal wages during the production halt, the company said.

Ford also said it would delay the start of production of its Mondeo sedan to March 2009 from the fourth quarter of this year.

Ford makes about 70,000 popular Focus models per year at its only Russian plant near St. Petersburg.

Foreign automakers have been hoping that high demand in Russia will bolster flagging sales in the more saturated Western markets. Those hopes have dimmed somewhat as the country's economic growth has been hurt by the financial crisis.

Sales of foreign-brand cars in Russia rose 9 percent in October, the slowest pace this year, as banks have tightened lending and job cuts raise concerns that incomes may decline.

Ford sold 18 percent less cars in October than a year earlier.

Analysts are expecting Russia's new-car market, including both global and domestic brands, to reach as much as 2.8 billion vehicles this year, compared with almost 3.2 million in Germany.

(Reuters, MT)