News: Ford Mondeo production shifts to Spain

Ford has confirmed today that it will be shuttering its factory in Genk, Belgium and transferring production of the new Mondeo to its Spanish factory in Valencia.

The news will have come as a terrible blow to the 4,300 people Ford currently employs in Genk, building the Mondeo, S-Max and Galaxy. The all-new Mondeo, based on the US-market Ford Fusion, had been earmarked to be built in Genk, but when Ford delayed its European market introduction by 6 months, we smelled a rat. There were even rumours that production of the Mondeo would move to low-cost Mexico, but yesterday the announcement came that Genk was going and Valencia was getting the gig.

That means that Genk will continue on its current four-day-week for a time yet, turning out the current Mondeo and S-Max & Galaxy, but will be progessively closed down as production of those models winds up. No word let on whether Valencia gets to build the next S-Max and Galaxy, but it's likely.

The move comes as Ford seeks to both stem losses of €404-million this year in Europe, and against the background of a meltdown in European car sales that is seeing the long-standing problem of over-capacity in the industry (too many factories turning out too many cars for too few buyers) finally being tackled. Fiat has already closed a facotry in Sicily and may close another, PSA Peugeot Citroen has earmarked its Aulnay plant for closure and GM's Bochum plant in on the chopping block too.

News: Regulator investigates Fiat cash pile

Consob, the Italian stock market regulator, is apparently investigating Fiat's reputed €23-billion cash pile and asking why Fiat boss Sergio Marchionne isn't dipping into it to prop up Fiat's investments in the flagging Italian economy.

Fiat itself has cash reserves of around €12-billion, with the other €11-billion belonging to Chrysler. According to reports, Fiat can't access the Chrysler cash for European investment (or to subsidise European losses) because of a complex deal agreed with the US Government when Fiat rescued Chrysler from bankruptcy.

Even so, Marchionne, the Italian Prime Minister Mario Monti and Consob have been at repeated loggerheads over the past few months. Fiat is threatening to close down another Italian factory (it closed a plant in Sicily last year) and is idling some plants, including one that builds the Panda. That's because Marchionne sees nothing but financial pain in Europe right now, and has put a stop to all major investments and new model developments for the time being, leaving the burgeoning Chrysler to expand in the now-healthy US market and deliver much-needed profits.

The Italian Government, of course, is not keen on this at all, and the investigation (which Fiat currently says it is, officially, unaware of) is being seen as a strong-arm tactic to get Marchionne to unlock at least some of the money to invest in the Italian market.

Marchionne may be holding on to his money for another reason though; Opel. Opel is continuing to lose money for General Motors and analysts Morgan Stanley last week said that it expects that co continue, at the rate of $1-billion a year, through to 2021. GM is being urged to sell Opel and cut its losses, and Fiat, which made an offer for Opel amidst GM's 2009 bankruptcy, is thought to be once again interested.

GM is quashing such rumours though, saying that Opel is an integral part of its operations and will continue to be so, and that the recently-inked tie-up with PSA Peugeot Citroen is progressing well and is expected to save both companies €2-billion a year.