Germany: eurozone crisis causes Ford to appeal to short-time working

Short-time working for Ford.  The warning signs of another crisis in the automotive industry or simple, passing weakness?  Ford appealing to short-time working shows that Germany too is starting to feel the crisis’ impact on the European markets.  Ford is particularly affected because 85 percent of Fiestas, produced in Cologne, are sold in Europe, notably southern Europe.  For 2012, Ford is expecting sales to drop – 1.3 million vehicles down from 2011.  To anticipate this, Ford announced that 4,000 employees (out of a total of 17,000) would be on short-time working.  The carmaker intends to stop production for eight days before the plant’s summer break and eight days after it – preventing the production of 23,000 cars.  Soon, Ford is going to send the Federal Employment Agency its short-time working request.  Since January 1, 2012, the special short-time working assistance measures, which the government introduced during the financial and economic crisis in 2009, have been cancelled (see our dispatch No.  120001).  However, the system still exists – in its earlier form.  As it used to be, the Federal Employment Agency will compensate 60 percent of the affected employee’s net loss of earnings, but for six months maximum (as opposed to 24 months at the height of the crisis).  Businesses have to pay all social contributions again.  To help Cologne staff, Ford is planning to give them wage supplements.  However, in Saarlouis, there will be no short-time working.  Employees on both sites are protected against economic layoffs until 2017.