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Ford to pay Genk workers $750m

11:41 20/03/2013

Workers at Ford Motor Co’s plant in Genk will get $750 million (€580 million) in severance as part of a deal that allows the carmaker to close the factory by the end of next year, reports Reuters’ Deepa Seetharaman. The announcement was made by the company in a regulatory filing yesterday. Ford and the 4,000 hourly workers at the plant reached a deal last week that allows the US company to go through with its plan to close the factory, which builds the Mondeo sedan, known in the US as the Fusion. Negotiations over severance pay between Ford and the plant’s 300 salaried workers are under way. The $750 million payout means an average of $187,500 per hourly worker. The payment is less than General Motors Co spent in 2010 to close its factory in Antwerp: about $527 million to the plant’s 2,600 workers for an average payout of $202,700. Ford announced in late October that it would be closing the Genk plant as well as two in Britain to stem its losses in Europe, where an economic downturn has hurt demand for new cars. Industry figures released yesterday showed the European car market logged its worst February for sales in at least 23 years. Ford and GM both recorded a roughly $1.8 billion loss in Europe last year. Ford expects to lose another $2 billion in the region this year. Chief executive Alan Mulally has said Ford will not rule out further capacity cuts and other actions if the situation worsens in Europe. In all, Ford plans to cut 18% of its capacity in Europe and will transfer the work being done in Genk to its plant in Valencia, Spain. The decision triggered angry protests in Cologne, Germany, where Ford’s European operations are based.

Written by The Bulletin