Ford's Southampton factory will close next week after almost 80 years

Ford closes Southampton Transit plant

Ford’s Transit van manufacturing plant in Southampton will close next week, a victim of low manufacturing costs in Turkey. 

The closure, announced in October last year, results in 531 workers being made redundant with further 750 people affected in tool and stamping operations in Dagenham, Essex.  All Southampton production will now be moved to Turkey, which offers “significantly lower” production costs than any European country.

The Turkish factory in Koceali, which has been in full production mode since 2009, has much bigger capacity than Southampton, building 185,000 vans in 2012, compared with the UK plant's 28,000.

The closure marks the end of more than a century of Ford's whole-vehicle production in the UK. The Southampton factory, which started as an aircraft plant assembling Spitfire aircraft during the Second World War, has been run by Ford since 1953. It is now going to be partially rebuilt into a refurbishment centre that will support a new vehicle distribution centre set up at Southampton docks.

"The distribution centre will form part of Ford's logistics operations, involved in import vehicle handling and onward distribution, and the shipping of engines to China. Low mileage used vehicles will be processed by the refurbishment centre for supply to the Ford Direct sales programme," Ford’s spokesman said. 

The Southampton plant have been manufacturing Ford’s Transit vans since 1965. It is estimated that more than 2.2 million Transits have been made in Southampton in the past 40 years.

"We understand the impact of these restructuring actions on our employees and have provided individual support to ensure that all employees have made fully informed decisions about their future on a voluntary basis,” said Stephen Odell, president of Ford Europe, Middle East and Africa.

A new £1.9m powertrain tool room is now being established within the engine plant at Dagenham, which will redeploy 400 employees affected by the closure of the Dagenham stamping and tooling operations.

"We are reaffirming our commitment to the UK with a major investment in powertrain and engineering, which reinforces the UK's central role in Ford's global powertrain strategy and commercial vehicle engineering," Odell said.

The last Transit to be produced at Southampton would be added to the company's 100-vehicle heritage collection.

Ford is not the only car manufacturer contemplating factory closures in Europe. Peugeot is reported to have sought a similar solution to balance out falling revenues in the passenger vehicle market.

As new data has revealed, European car sales have hit the record low during the first half of 2013, with a 6.3 per cent drop in June. Italian Fiat recorded the biggest decrease with a 13.6 per cent drop, followed by Peugeot at 10.9 per cent. Ford has managed to avoid the trend with a 6.9 per cent rise.

"Even if there is a recovery in the second half of the year, it's hard to see how it could be strong enough to offset the bad results we've registered so far this year," said Quynh-Nhu Huynh, economics and statistics director at the Association of European Carmakers (ACEA), which compiled the figures.

Grim outlooks are worrying most of the European car makers. BMW’s chief executive Norbert Reithofer said in a newspaper interview on Tuesday he did not expect a rebound in western European markets until at least the middle of next year.

Nonetheless, some analysts were encouraged that sales fell at a slower pace than in many previous months.

"The market has bottomed out, for sure," said Pierluigi Bellini, head of sales forecasts for EMEA (Europe, Middle East and Africa) at IHS Automotive. "We can't talk about a recovery this year, but we see smaller monthly declines going forward."

The German market, which had resisted much of last year's slump, shrank 4.7 per cent in June, while sales in France and Italy fell 8.4 and 5.5 per cent respectively as unemployment and austerity measures curb consumer spending.

Sales in Britain, in contrast, remained robust, notching up a 16th straight month of gains with a 13.4 per cent increase.

Among luxury carmakers, Mercedes posted a 2 per cent gain, powered by new models, while the BMW brand fell 7.7 per cent and Volkswagen's Audi dropped 8.9 per cent.

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