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. Last Updated: 07/27/2016

Ford Europe Axes 3,000 Belgian Jobs

BRUSSELS, Belgium -- Ford Europe said Wednesday that it was cutting 3,000 jobs at its Belgian Genk plant, as it scrapped plans to produce the new generation of its Focus brand there in order to slash costs and return to profit.

"We need to significantly increase the pace of cost reductions in Ford Europe if we [want] to return to profitability," Lewis Booth, the president of Ford Europe, told a news conference.

"We must make sure we are not investing in excess capacity," he added.

The cuts come at a time when few European carmakers expect profits to grow this year as they battle declining demand, adverse currency effects, a tough pricing environment exacerbated by an onslaught from Asian rivals and long-standing overcapacity.

Prime Minister Guy Verhofstadt, who faces an uphill struggle to create some 200,000 new jobs in Belgium in the next four years, met European management of Ford later on Wednesday.

Booth said he expected Ford Europe to return to profitability in the fourth quarter of this year, but did not expect any significant pickup in industry volumes in the foreseeable future or even next year.

"Overall industry volumes are down and frankly we don't expect them to pick up in the foreseeable future," Booth said, adding that capacity in Europe is increasing.

Besides canceling the Focus investment -- which was announced last year and would have amounted to about 230 million to 250 million euros for the Genk plant -- Ford also plans to cut daily capacity of the Mondeo brand in Genk to 840 from about 1,100 now.

Two other European plants, including Saarlouis in Germany, will handle the production of the new Focus.

Ford Genk currently employs 8,300 workers and that number would drop to about 4,700 by the end of 2004 as the new job cuts would come on top of earlier announced lay-offs.

The plant last year produced 362,200 cars.

In 1997, French carmaker Renault closed down its Belgian plant in Vilvoorde.

Ford, the world's second-largest carmaker, told its U.S. employees on Tuesday it would cut some 3,000 salaried jobs by the end of the year.

Last year, Ford said it wanted to cut about 12,000 hourly jobs in North America as part of its turnaround plan aimed at generating $7 billion in pretax profits by mid-decade.

Ford has about 79,000 salaried employees worldwide, with about 50,000 in North America. In addition to the North American cuts, Ford's German arm is offering buyouts to 700 salaried workers and 1,000 hourly workers.

The job cuts in Germany and Belgium are separate from that total.

A spokesman for Ford Europe in Britain said the job cuts in the United States have been a bargaining point with United Auto Workers and that the announced 12,000 cuts in the U.S. might change once details -- which could come as early as Thursday -- of the UAW deal with Ford are known.