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Ford Announces Closure Of 1,700-Employee Plant In Wales; Union Says It's 'Economic Betrayal'

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Ford Announces Closure Of 1,700-Employee Plant In Wales; Union Says It's 'Economic Betrayal'

Automaker Ford Motor Company (NYSE: F) confirmed Thursday it will close an engine factory in Wales in September 2020, CNBC reported.

What Happened

Ford cited its desire to become a more efficient company in Europe in its decision to close the factory.

Stuart Rowley, the president of Ford of Europe, told CNBC that fulfilling the objective requires "difficult decisions" along with the need to scale its global engine manufacturing footprint to serve its future vehicle portfolio.

The company also said its decision is based on the loss of a contract to create engines for Jaguar Land Rover cars, along with a general decrease in demand for Ford's 1.5-liter engines. The multiple factors make the Wales plant "economically unsustainable in the years ahead," Rowley said. 

Ford said it will assume a charge of $650 million related to the closure, with two-thirds of the amount allocated to employee compensation.

Why It's Important

The decision amounts to a "grotesque act of economic betrayal," said Len McCluskey, the general secretary of the U.K.'s second-largest union, Unite, according to CNBC. 

"These workers and this community have stayed faithful to Ford, as have U.K. customers — this is still Ford's largest European market — through thick and thin, but have been treated disgracefully in return by this company," he said. 

Ford has operated the site since 1977, and it employs about 1,700 people, according to the report. 

What's Next

McCluskey said his organization plans on fighting the plant closure. 

Ford shares were down by 0.51 percent at $9.73 at the time of publication Thursday. 

Related Links:

Analyst: Ford Salaried Job Cuts May Be Part Of New World In Auto Industry

Bank Of America Back On Board With Ford, Sees Sustainable Earnings Inflection

Photo by Dave Parker/Wikimedia

Posted-In: auto automotive CNBC Europe Stuart RowleyNews Media Best of Benzinga

 

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