Reuters reported that Ford is expected to tell unions they are closing the Plant in Genk which employs 4,300 workers. The plant only makes a few Ford models and Ford is preparing to produce them elsewhere in an effort to cut European losses. In July the automaker doubled their European loss guidance to $1 billion and stated that they had to decrease production to mirror the slowing demand.
At first glance this seems like negative news, but GM is also struggling in Europe. Ford sales in the United States have been extremely strong and don't show any signs of slowing down. This plant closure in Genk should increase shareholder value and help Ford to continue performing well. Ford has been doing a remarkable job at paying back massive debt created during the financial crisis quickly as well as reinstating their dividend. Unlike General Motors Ford did not require a bailout. Ford's stock still remains extremely undervalued at a current P/E of only 2.27. Ford is scheduled to report earnings on 10/30. People aren't expecting anything out of their European sales results, but if U.S. sales continue to increase this stock could get a nice pop and continue to climb through years end.
Update: Ford will close the plant by the end of 2014. This will also effect close to 5,000 subcontractors bringing the job cuts to almost 9,000
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