"Burnt and abandoned" writes James Fontanella-Khan writes in the Financial Times, Thursday 3rd January 2013 “The charred wreckage of a Ford Mondeo set alight by protesting workers outside the plant's gate."
Ford car plant in industrial Belgian town of Genk in eastern Flanders is to shut. A company meeting in October 2012 informed the 4,300 workers that the US car maker, which laid its first brick at the facility in 1962 was shutting the plant down.
Worker Peter Hulsmans: “We always thought there was more security working for a multinational than a small company but we were wrong. Ford is going and nobody will replace them, nobody wants to invest here any more”.
As global companies slash investment, shut operations and shed jobs, the trend is heightening fears of a fresh chapter in Europe's protracted crisis. Foreign companies that once considered Europe a haven for slow but sure growth are now rapidly closing plants or cutting investment.
Between 2007 and 2011, annual investment in the 27 EU countries dropped by more than €350 billion according to a study published last month by US consultants McKinsey. That lost investment means companies in Europe will not generate €543 billion in revenues.
Businesses are cutting costs by shifting operations to emerging markets to take advantage of cheaper production; and shedding thousands of jobs, contributing to record levels of unemployment in the EU.
The list of high-profile closures and divestments in manufacturing is growing. Just five months before Ford announced closure of its Genk plant, General Motors shut its 50-year-old Opel plant at Bochum in Germany's Ruhr rust belt region, shedding more than 3,000 jobs. Dow Chemical announced in October the closure of operations in Belgium, the Netherlands, Spain and the UK to shore up the bottom line. Hewlett-Packard has axed 8,000 positions in Europe as part of a restructuring effort. Kimberley-Clark, the maker of Kleenex tissues has closed most of its European factories in its efforts to boost profitability.
Overall, global companies have lost close to $2 trillion as a result of the sovereign debt crisis that has engulfed Europe since 2009, according to US consultancy Grant Thornton.
The shift is taking place not only in manufacturing but has also began to manifest itself in financial services. Nomura, Japan's leading investment bank cut costs in Europe by $1 billion, and announced in September it would further reduce its presence and focus more on fast-growing Asian markets.
A broader scaling back of investment in Europe could deepen the double-dip recession that appears under way. Foreign direct investment has shrunk at a rate of 10% a year since 2008, according to European Central Bank data. Merger and acquisition activity is down 34% on 2011 and down 70% on its 2007 peak., according to the OECD.
“The future is dark for Europe” - Adrian van den Hoven, director of international relations at Business-Europe, the EU's main employers' lobby”.
Steve Clayton
Ford car plant in industrial Belgian town of Genk in eastern Flanders is to shut. A company meeting in October 2012 informed the 4,300 workers that the US car maker, which laid its first brick at the facility in 1962 was shutting the plant down.
Worker Peter Hulsmans: “We always thought there was more security working for a multinational than a small company but we were wrong. Ford is going and nobody will replace them, nobody wants to invest here any more”.
As global companies slash investment, shut operations and shed jobs, the trend is heightening fears of a fresh chapter in Europe's protracted crisis. Foreign companies that once considered Europe a haven for slow but sure growth are now rapidly closing plants or cutting investment.
Between 2007 and 2011, annual investment in the 27 EU countries dropped by more than €350 billion according to a study published last month by US consultants McKinsey. That lost investment means companies in Europe will not generate €543 billion in revenues.
Businesses are cutting costs by shifting operations to emerging markets to take advantage of cheaper production; and shedding thousands of jobs, contributing to record levels of unemployment in the EU.
The list of high-profile closures and divestments in manufacturing is growing. Just five months before Ford announced closure of its Genk plant, General Motors shut its 50-year-old Opel plant at Bochum in Germany's Ruhr rust belt region, shedding more than 3,000 jobs. Dow Chemical announced in October the closure of operations in Belgium, the Netherlands, Spain and the UK to shore up the bottom line. Hewlett-Packard has axed 8,000 positions in Europe as part of a restructuring effort. Kimberley-Clark, the maker of Kleenex tissues has closed most of its European factories in its efforts to boost profitability.
Overall, global companies have lost close to $2 trillion as a result of the sovereign debt crisis that has engulfed Europe since 2009, according to US consultancy Grant Thornton.
The shift is taking place not only in manufacturing but has also began to manifest itself in financial services. Nomura, Japan's leading investment bank cut costs in Europe by $1 billion, and announced in September it would further reduce its presence and focus more on fast-growing Asian markets.
A broader scaling back of investment in Europe could deepen the double-dip recession that appears under way. Foreign direct investment has shrunk at a rate of 10% a year since 2008, according to European Central Bank data. Merger and acquisition activity is down 34% on 2011 and down 70% on its 2007 peak., according to the OECD.
“The future is dark for Europe” - Adrian van den Hoven, director of international relations at Business-Europe, the EU's main employers' lobby”.
Steve Clayton
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