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. Last Updated: 07/27/2016

Ford to Lay Off 1,900 at British Plant

LONDON -- Ford Motor Co. announced Friday that it plans to slash 1,900 jobs at its largest vehicle assembly plant in Britain as part of an effort to restore profitability to its money-losing European division.

Ford said it aims to eliminate the jobs at its assembly plant at Dagenham in East London by 2002. Over time, however, it plans to add more than 500 jobs at a separate plant at Dagenham that makes diesel engines, leaving the site with a net loss of about 1,400 positions. Ford said the cuts would be voluntary.

The announcement followed a three-month review aimed at restructuring Ford's operations throughout the region.

The decision to lay off employees at Dagenham was "very difficult and quite painful,'' Ford of Europe chairman Nick Scheele told a news conference.

The Dagenham assembly plant, built in 1931, produces Fiesta cars, Courier vans and Mazdas for sale in Britain and elsewhere in Europe. The plant has been running far below capacity, producing 191,000 vehicles last year when it was designed to handle 278,000.

Ford said in February that it was cutting 1,350 jobs from the assembly plant, and workers feared the company would close the facility altogether.

Ford's assembly plant in Cologne, Germany, will become the main facility for production of Fiestas.

"The decision has to do with where is the optimal location for vehicle manufacture,'' Scheele said. "Sadly, Dagenham doesn't have the infrastructural flexibility that Cologne does.''

He denied that Britain's labor laws, which are relatively less stringent than in many other European countries, were a factor in the company's choice to make layoffs in Britain. He also denied any effect from the strong pound, which makes British exports more expensive than competing cars and parts priced in euros.

Ford's European division lost $55 million last year and $3 million in the first quarter of this year.

Ford wants to cut $1 billion in fixed costs at its European operations. The job reductions at Dagenham would contribute some $400 million of that amount, Scheele said.

The company plans to invest $500 million in its engine plant at Dagenham to make it a global center for diesel-engine production and design. The enhanced plant would supply Ford worldwide and possibly other carmakers, Scheele said.

"We are lagging in the availability of diesel engines'' and are "desperately'' in need of more, he said.

Scheele acknowledged that the job cuts at Dagenham run counter to a commitment Ford made almost three years ago to invest more money in manufacturing there.

As a sweetener, Ford will provide $12 million in financial support for employees who lose their jobs.

Ford currently employs 21,800 people in Britain, 8,000 of them at Dagenham. Elsewhere in Europe, Scheele announced that Ford will discontinue production of Escort and Transit models at its assembly plant in Obchuk, Belarus, by July of this year. He blamed the move on poor demand and depressed economic conditions in Belarus.

British unions Friday blasted Ford's decision to stop car production at its biggest British plant and vowed to thwart the plans from coming to fruition, Reuters reported.

"It is quick, cheap and easy to sack British workers and Ford's move is blatant opportunism ... and we will oppose their intentions," Tony Woodley, chief auto negotiator for the Transport & General Workers Union, said during a joint union news conference.

Woodley said unions would hold an emergency meeting with representatives at Dagenham next Tuesday.