Ford Ready to FUEL U.S. Market Share
Ford (NYSE:F) decided this week to realign its workforce. A meeting between Belgian union officials Thursday gave strength to persistent rumors of the Genk plant closure, while Monday the automaker announced its plans to increase U.S. market share with a new Fusion sedan and a redesigned Escape crossover.
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The European economic crisis, and the resulting decrease in auto sales on the continent, have caused Ford and other car manufacturers to search for a solution to the excess production capacity produced by Europe’s five-year market slump. Ford, which employs more than 4,000 workers at its Genk plant to assemble the Mondeo sedan, doubled its 2012 European loss forecast to $1 billion in July. Overall, European registrations have slumped 11 percent this year. A spokesperson for the company said action was needed to decrease “production to match real demand,” but would not comment on the possibility of factory closures and cuts.
Spokesman for Genk’s ABVV union Rohnny Champagne said, “We didn’t receive any assurances on the future of the Genk plant.”
In an effort to halt the decline in sales and market share, chief executive Alan Mulally is presenting new European models, an updated Mondeo, the Fiesta mini, and the EcoSport compact SUV. General Motors’ (NYSE:GM) Opel division is preparing to reduce capacity as well.
Market share has always been a dogfight between the U.S. automakers. Ford may recover some of its lost market share in the United States with the release of the Fusion midsized sedan, and the new Escape crossover, a top executive at the automaker said. The redesigned Fusion will be competitive with the Toyota (NYSE:TM) Camry and the Honda (NYSE:HMC) Accord.
According to Ford Americas President Mark Fields, both models compete in segments that account for a third of all auto sales to U.S. consumers. “With these new products we’ll have the opportunity to gain share,” he said in a statement at the renamed Flat Rock Assembly Plant in Michigan. The company announced it will hire workers for second shift at the plant beginning in the second quarter of 2013.
The automaker, which has had sales grow 6 percent in August compared to last year, saw its market share drop from 16.3 percent in August 2011 to 15.3 percent this year.
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