Ford Refuses Netherlands' Court Order - Plant Doomed

The Ford Motor Company recently decided it would stop supporting its debt-ridden Netherlands subsidiary. In so doing, Ford has dashed the hopes of 1700 Dutch workers who have struck to keep the plant operating. Ford also has shown that a multinational corporation cannot be held accountable for financial obligations in a foreign country where it operates.

After a two-week strike in late June and early July, workers at the Ford plant in Amsterdam were assured by a Dutch court that Ford would not close its factory as planned on September 30 (MM, August, 1981). The court said it would undertake a special court investigation of the matter, during which time the company would be liable for a $400,000 fine for every day it cut back production or dismissed employees.

In a letter dated September 10 from James McDougall, executive vice president of Ford's international automotive operations, to the managing director of Ford Nederland N.V., Ford international pulled the plug on the Dutch plant. Ford international does "not intend to support the financing" of the company "beyond November 30, 1981," the letter said.

The attitude of Ford headquarters toward the court's concern for employment was clear. "If that closing cannot be accomplished, because you are required by Netherlands' law to give priority to the maintenance of employment," McDougall told the Dutch director in his letter, "then you may not expect Ford U.S. to provide further financial support or to make good further losses resulting from operating under such conditions."