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June 30, 2022

Ford could relocate part of Fiesta production to Craiova in 2017

Ford Romania confirms the discussion with Cologne union representatives, in December, but without giving other details.

The production unit for Ford Fiesta cars could be partially relocated to the factory in Craiova, Romania, because the unit in Cologne may be forced to apply drastic cutbacks following losses of EUR 1.2 billion reported by European company branches in 2013, according to data published yesterday by German newspaper Bild, which cites sources close to U.S. carmaker. The relocation could be finalized in 2017 and is expected to affect approximately 1,000 employees of the Cologne factory.
“At a meeting with employees of the production unit in Cologne that took place last December, Ford confirmed discussion must be had with German union representatives regarding the production of next generation Ford Fiesta cars at the plant. Although this will not happen in the near future, it is important for Fiesta production to maintain competitiveness at the plant in Cologne. We have nothing more to add at the moment,” Ana-Maria Timis, spokesperson for Ford Romania, stated.
Neither Bernhard Mattes, Director of the German factory, nor American managers have specified what their exact medium-term plans are. “The plan aims at Cologne employees building 1,200 units in the morning and night shifts. According to the size of the demand, our Romanian colleagues could take over the remaining Ford Fiesta production,” the company press release shows.
Ford managers claim “night-shift workers in Cologne earn EUR 500 net more than their morning or evening-shift colleagues. There are 1,000 night-shift jobs, and in times of crisis this where the saving potential resides.” Based on statistics provided by Frankfurter Allgemeine Zeitung, Bild notes Romanian wages are EUR 5/hour, which accounts for only 10 per cent of the overall costs born in Germany. Therefore, more poorly paid Romanians could build a Ford Fiesta EUR 1,300 cheaper than their colleagues in Cologne.
At present, Ford produces the B-Max model and 1.0 liter and 1.5 liter EcoBoost gasoline-based engines in Craiova, the latter of which is attached to models produced in North America and Asia. Ford Romania has recently announced it will stop car production for four days in February due to low demand. The car production facility in Craiova was shut down last year for almost 35 days, whereas engine production was closed for seven days.
Ford recorded a net income of USD 7.2 billion, or USD 1.76 per share, and a 2013 pre-tax profit of USD 8.6 billion, a USD 603 million increase compared to 2012.
North America remained Ford’s most profitable market in 2013, posting an US 8.8 billion pre-tax profit, a USD 438 million increase compared to 2012 and a record since 2000.
Outside of North America, Ford’s Asia-Pacific-Africa operations led the way with a USD 415 million profit compared to a USD 77 million loss in 2012, followed by South America incurring a USD 34 million loss and Europe recording a USD 1.6 billion loss for the year. Ford Credit reported solid pre-tax results of nearly USD 1.8 billion, a USD 59 million improvement.

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