Hot Features
Premium
Trade like a pro: Leverage real-time discussions and market-moving ideas to outperform.
Perhaps the biggest financial news of the day is not the trend of the FTSE 100 nor the rise or fall of a single company’s share price. It’s not even the continuing saga of the banking scandals. It’s Ford Motor Company’s announcement of the imminent closure of its Transit van assembly plant at Southampton and its stamping plant at Dagenham. Richard Williams of the Southampton City Council, called it “An absolute kick in the teeth.”
The closures are slated to take place by the summer of 2013. The disheartening news came one day after the company announced that it would close its plant in Genk, Belgium, in 2014. It is not known yet if this is the sum total of Ford’s planned closures in Europe or if it is the first and second in a string of such announcements. It is expected that Ford will reveal more details today. The UK closures will put some 1,400 Brits out of work. The company has indicated that it will offer some redundancy packages and some relocation opportunities.
Reactions to the Shutdown
At this point, remarks, from employees to the unions to media and to government officials, are all reactions. Broader, more analytical responses should be forthcoming in short order. For now, however, here is how people are reacting. John Denham, Labour MP for Southampton Itchen, said workers had been “let down.” Roger Maddison, at Unite the union described the closures as “absolutely disgraceful. The UK is Ford’s biggest car market in Europe and yet we’re not going to be making vehicles here.” Richard Williams added that “There’s been no fore-warning or opportunity for planning in advance from Ford or anybody. It was literally just dropped on us.” Christoph Stuermer, an automotive sector analysts, predicted that more closures are yet to come. “In my expectation, one other passenger car factory will have to close.” Roger Maddison added that “The (union) reps for the two plants are devastated. We will do everything we can to scupper this plan. The Transits are iconic vans and should be made in Southampton, which would keep Dagenham open. This is a disgraceful way to treat people.” David Bailey, of Coventry University business school, called it “yet another blow in terms of the UK manufacturing base.” He sagely pointed out that more jobs will be lost in the trickle-down effect as Tier 1 through Tier 3 suppliers have to cut back or close their doors due to the loss of Ford business. Bill Chandler, a former Ford employee who took redundancy a few years ago asked the question, “How are (young families) going to manage? It’s extremely bad news. Is Ford going to keep up their commitment to keep their pensions going and are they going to ensure these workers are being looked after?
Realities of a Shutdown
Right now, everyone is reacting pretty much as one would expect. Analysts are trying to figure out Ford’s next move. Reporters are digging for more details. Union leaders are strategising how to “scupper” the shutdowns. Government officials are worried about what to do to be re-elected (That’s what they do anyway). Spouses of employees are weeping and asking “Why?” Employees are in a state of shock, going to work in a stupor, some induced by anxiety, others induced by liquid solace. I know. I’ve been there. Twice.
It’s not a pretty sight seeing hard-working, grown men crying as they leave the place that has been their life and where they have given their all for decades to make sure the company succeeds. There is no word that can adequately described the sight of a thousand men, who have worked so hard in the trenches, walking away for the last time, all of them with heads and shoulders drooping. All of them wondering how this could happen when they had given so much. All of them wondering what to do next. None of them realizing that the sun is shining because they are overcome with the darkness of despair.
You see, the workers were deceived. They bought into the party lines of “We’re all in this together” and “You make the difference” or “We couldn’t do it without you” or “We are a family.” All of that is motivational horse-hockey. It boils down to the famous line in “The Godfather” — “It’s not personal. It’s business,” which was said right before one mobster killed another one. The last time I recall a company actually caring about its employees and about it’s effect on the local community was in the early 1980’s. It is now a distant memory. And I was probably deceived.
The company does not care about you. The company cares about the company. That’s not necessarily bad, except when it comes down to plant closures when thousands of lives are affected directly of indirectly. Then it doesn’t matter what commitments a company made to the community or to its suppliers or what vision it promoted to its employees. The “company” — guys who don’t even know your name or what you do — is going to do whatever it takes to save the company and their jobs, because without them there is no company.
I have seen a community devastated when the biggest plant in town shut down. The company consumed well over half of the water and electricity in the town. That source of city income was gone overnight. That will wreak havoc with a municipal budget. I have seen multiple subcontractors and component suppliers declare bankruptcy and close their doors because their major customer moved operations to another country.
A Final Word
Ford Motor Company announced the imminent closure of its manufacturing facilities in Southampton and Dagenham. For reporters, pundits, analysts, investors, and Ford, it’s business. For more than 1,400 employees, it’s personal.
