Sky Sources: Ford To Close Southampton Plant

Ford is planning to close its Southampton factory as part of its restructuring in Europe, according to Sky sources.

The announcement is expected on Thursday, when Ford's Chief Executive Alan Mulally is due to hold a business briefing call and company management meet union representatives in Essex. 

The company said this was speculation.

It emerged on the day high street retailer Argos said it will have to close 75 stores over the next five years - in another damaging sign about the state of the economy.

The firm reported a 37% fall in group pre-tax profit to £18m in the six months to the start of September.

Ford's Swaythling factory, which has built its iconic Transit vans since 1972, employs around 500 people.

But the future of the site has been uncertain since workers began working single shifts in 2009.

It is a relatively small part of the company's UK operation, which employs 11,400 people at factories in Dagenham, Halewood, Bridgend and Southampton.

The news comes after the company confirmed it would close its "under-utilised" factory in Genk, Belgium, resulting in 4,300 job losses.

"Ford announced its plans to end production at a major production plant in Genk, Belgium, by the end of 2014," the company said in a statement, adding that the closure would entail a "reduction of approximately 4,300 positions".

Ford of Europe's Chief Executive Stephen Odell added: "The proposed restructuring of our European manufacturing operations is a fundamental part of our plan to strengthen Ford's business in Europe."

In another development for Europe's carmaking industry, the French government offered Peugeot Citroen a 7bn euro (£5.6bn) lifeline following another drop in sales.

The Paris-based company said it was also close to agreeing a 11.5bn euro (£9.3bn) refinancing deal with creditor banks, in addition to the state guarantees, for its lending arm Banque PSA Finance.

Following the announcement, Peugeot shares fell 6.5% - hitting their lowest levels since 1986.

Car sales in Europe have slumped as consumers in the region find their budgets hit by unemployment and government austerity.

Earlier this month, industry figures revealed that the market shrank at its fastest pace for 12 months in September.