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Ford's Plan for Europe Starts to Unfold

John Rosevear
October 22, 2012

Did Ford (NYSE: F  ) just tip its hand about its plans for Europe?

Ford management has called  an "emergency meeting" with the three unions representing workers at its assembly plant in Genk, Belgium, according to a Reuters report. The news comes amid rising expectations that Ford will move to close the factory that makes the Mondeo sedan and Ford's European-market minivans.

The meeting is set to happen bright and early on Wednesday morning. Is Ford's plan for Europe about to unfold?

Putting changes in gear
It's no secret that Ford CEO Alan Mulally and his team have been planning drastic action for Ford's troubled European operation, which lost $404 million last quarter with more red ink expected.

But details have been scarce. Aside from a few hints, and an announcement that Ford would expand its product offerings in the region, Ford has kept quiet about its plans for returning the unit to sustainable profitability.

It looks like that may be about to change. Although Ford isn't commenting on the report, union officials have expressed concern about the unusual meeting and clearly fear the worst. While Ford has said that it will begin building an all-new Mondeo -- a near-identical twin to just-launched Ford Fusion -- in Europe next year, it hasn't said where it will be building the new sedan.

Now it's looking like the answer won't be "Genk." How is this likely to play out?

No. 1 on nearly everybody's hit list
While some analysts have pointed to Ford facilities in Spain and Germany as possible candidates for Ford's to-close list, the Genk factory has been widely thought to be the most likely victim. Genk is running far below its maximum capacity -- the outgoing Mondeo has been an unpopular model -- and in where Ford (and its rivals) clearly have too many factories, the slowes