What is in this article?:
- Ford, Dow Chemical Join Growing List of U.S. Manufacturers Fleeing Europe
- 'Deplorable' Growth Prospects in Europe
In light of the eurozone crisis, U.S. manufacturers are singling out that region for cuts, aiming to boost savings and lower exposure to markets suffering from overcapacity and falling prices.
Some of the biggest names in U.S. manufacturing are cutting back staff and shuttering plants in Europe, as the continent is buffeted by a grinding recession and a seemingly never-ending financial crisis.
Releasing quarterly earnings reports over the past two weeks, U.S. industrial giants say they are feeling the squeeze everywhere, citing the slowdown in China and uncertainty at home in the United States.
But in light of the eurozone crisis, businesses are singling out that region especially for cuts, aiming to boost savings and lower exposure to markets suffering from overcapacity and falling prices.
Ford Motor Co., Dow Chemical Co. and Kimberly-Clark Corp. all announced cutbacks specifically in Europe this week, while DuPont & Co. (IW 500/36), Colgate-Palmolive Co. (IW 500/67) and computer-chip maker Advanced Micro Devices Inc. (IW 500/157) said they will be scaling back workforces or capacity without saying exactly where.
Coca-Cola Co. (IW 500/29) two weeks ago said it is moving the offices of its huge bottler, Coca-Cola Hellenic Bottling, out of crisis-mired Greece, sparking fears of coming layoffs there.
"Undoubtedly, businesses are concerned about world growth, not necessarily U.S. growth, but Europe and Asia as well," said economist Joel Naroff.
"They don't foresee growth in Asia and Europe in the short term," said Gregori Volokhine of Meeschaert New York. "The only market where there is still a little bit of growth is the United States."
Even in the United States, Volokhine added, businesses are on edge: They do not know how taxation and spending policies might change after the Nov. 6 presidential election.
"So to protect their bottom lines, they have no choice but to tighten up."
Much of the belt-tightening is in Europe.
Facing a $1.5 billion loss in Europe this year, Ford Motor Co. (IW 500/6) announced that it will close three plants -- two in Britain and one in Belgium -- and cut 6,200 jobs.
Dow Chemical Co. (IW 500/22) announced Tuesday that it will let 2,400 workers go as it shut 20 facilities worldwide, including at least four plants in Europe.
Dow said sales in Europe fell 10% in its third quarter, and prices fell 12%.
"The reality is we are operating in a slow-growth environment in the near term and, while these actions are difficult, they demonstrate our resolve to tightly manage operations -- particularly in Europe," said CEO Andrew Liveris.
On Wednesday, Kimberly-Clark Corp. (IW 500/59), which makes Kleenex tissues and other popular personal-care brands, said it will be paring 1,300 to 1,500 jobs in Europe, citing a sharp decline in sales in the region.