BERLIN – Ford Motor Co may scrap more plants and lay off more workers in Europe as the euro zone debt crisis continues to exacerbate the auto sector's overcapacity.
The situation in European markets remains "very volatile", Ford Chief Executive Alan Mulally said at a conference in Berlin on Wednesday, two weeks after the company announced it was cutting 6,200 jobs and production capacity in the region.
"We don't know whether it (European economy) will stabilize or hit bottom or not because it's continuing to decrease," said Mulally.
The second largest U.S. car maker said last month it will shutter a British van factory in Southampton and an associated stamping plant in 2013, and close down a bigger site in Genk, Belgium the following year.
Though Ford is done for now with restructuring plans, the company will continue to monitor European markets to gauge whether further action might be necessary, the CEO said, adding that economic prospects will be the main parameter.
"That will determine what we do - if we do anything more," the CEO said. "The most important thing is to match our production to the level of demand."
The European cutbacks at Ford are expected to generate savings of $500 million annually by 2015, the year when the U.S. car maker aims to achieve regional profitability. Ford, which posted a $468 million European loss in the third quarter, expects to lose a combined $3 billion in the region in 2012 and 2013.
General Motors , by contrast, has been busy forging an alliance with struggling French automaker PSA Peugeot Citroen that will not generate significant gains until 2016 at best.
GM's European Opel division has lost billions of dollars over the past decade and remains mired in talks with Germany's IG Metall labor union to close a factory in Bochum - but not until 2017. (Reporting By Andreas Cremer; Editing by Mike Nesbit)