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In the wake of expected losses up to $1 billion in Europe, American auto manufacturer Ford (NYSE:F) could be gearing up to close a factory in Genk, Belgium. An emergency meeting with unions at the Genk factory, announced on Monday, has sparked concerns that a long-speculated closure could be imminent. Shuttering the plant, which employs 4,300 people, would cost about $1.1 billion for an annual savings of $730 million.
The European auto market has been suffering across the board, and automakers have been struggling to cope. General Motors (NYSE:GM) closed a factory in Belgium in 2010. Mounting losses and the evaporation of demand have spurred a drive to wind down production. Peugeot Citroen and GM’s Opel have already announced restructuring plans that involve job cuts and plant closures.
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According to the European Automobile Manufacturers’ Association, new car registrations in the region declined for the twelfth straight month. September 2012 registrations were down 10.8 percent compared with September 2011, and down 7.6 percent for the year so far compared to last.
To cope, automakers are pursuing growth in other markets. Chasing a $3 billion investment in Brazil, GM is pushing seven new cars into the market, spearheaded by the widely popular Cruze and Onix. The massive Sao Paulo auto show this week will spur what GM hopes will be a 4 million vehicle market by 2015.
Separately, the company has expressed interested in increasing its 77 percent stake in GM Korea to 94 percent, giving the company total control in the operation. The Korea Development Bank currently owns a 17 percent stake, with China’s SAIC Motor Corp claiming the remaining 6 percent. The bank’s 17 percent stake gives it veto authority. The intention echoes a move last week where GM would increase its stake in its Indian division to 93 percent from 50 percent.
GM could be eyeing the Asian market for growth as Toyota (NYSE:TM) and Honda (NYSE:HMC) regain their balance after a territory dispute with China drove sales numbers into the ground. Both companies have had to reevaluate production operations in the country.
In its own pursuit for growth in the face of setbacks, Toyota Industries has announced an agreement to buy Cascade Corporation (NYSE:CASC), a manufacturer and distributor of parts for the lift and truck industry, for $759 million. Shares of Cascade are up over 17 percent on the news.
“The transaction will create a leading global materials handling business with a wider spectrum of products and a valuable platform for growth,” reads the press release.
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