The last Ford Transit van rolled off the production line in Swaythling, UK, ending a 40-year auto-assembly relationship with Ford Motor Co. (NYSE:F) as production shifts to Izmit, Turkey, located east of Istanbul, where Ford exports more vehicles than it sells domestically.
The plant closure affects 500 workers who are being laid off, accepting redeployment or claiming early retirement. Swaythling is a suburb of Southhampton with a population of about 13,000 people.
Ford’s Southhampton assembly plant has been manufacturing the Ford Transit light commercial vehicle since 1972, producing more than two million units in that period of time. But gone are the days when British workers assembled as many as 3,000 Ford vehicles a day as Ford seeks to lower costs by shutting three European facilities: the Southampton factory; a Dagenham, UK, stamping facility; and a body manufacturing and assembly plant in Genk, Belgium.
In all about 1,400 jobs will be affected by Ford’s global repositioning, and not all of these workers will be laid off. Ford is building a 12-million-pound ($1.8 million) vehicle redistribution facility to compliment an existing vehicle refurbishment center at Southhampton docks that will create 134 jobs, according to the BBC.
More significant to Ford’s vehicle-assembly exit from the UK is that it’s symptomatic of a larger issue regarding the cost of vehicle production in Europe compared to emerging markets. Europe’s auto industry crisis, which is seeing sales down to levels unseen in decades, isn’t helping.
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The Southampton facility has been Ford’s European production center for the Transit, and as recently as 2011 the company had said it would keep Southhampton as its Transit production center for Europe. But in 2012, Ford opened its third plant in Turkey to produce 110,000 Transits a year, bringing total annual production of Ford vehicles in turkey to 400,000 units. In October Ford announced the closure of the Southampton assembly plant.
Ford Otosan, a joint venture between Ford and Koç Holding A.Ş., has been exporting Ford vehicles at a faster rate than it's been selling them domestically. According a Renaissance Capital research note on the Turkish auto market released on Tuesday, Ford Otosan is expected in its second quarter to see a 14-percent decline in domestic sales, to 27,471, compared to the same quarter last year. But exports are forecast to rise 21 percent, to 63,252 units. The company will release its second quarter results locally on Aug. 2.