Car firm to tackle woes in Europe
Ford said on Thursday it will cut thousands of jobs, look at plant closures and discontinue loss-making vehicle lines as part of a turnaround effort aimed at achieving a 6% operating margin in Europe.
Ford Europe has been losing money for years and pressure to restructure its operations has increased since archrival General Motors raised profits by selling its European Opel and Vauxhall brands to France’s Peugeot SA.
Ford said it will seek to exit the MPV segment and focus on developing more profitable “crossover” and sports utility vehicles, and will stop making automatic transmissions in Bordeaux in August.
It will also review its operations in Russia, and combine the headquarters of Ford UK and Ford Credit to a site in Dunton, Essex.
“We are taking decisive action to transform the Ford business in Europe,” group vice-president, Europe, Middle East and Africa, Steven Armstrong, said in a statement.
“We want to be a net contributor of capital and not a net detractor,” Armstrong said later, referring to Europe’s financial contribution to US parent Ford Motor.
Asked whether the revamp could include plant closures in Europe, he said: “A review of the manufacturing footprint is part of this process.”
Armstrong said any layoffs and plant closures at Ford would be subject to the outcome of formal negotiations with labour representatives, adding that he hoped that job cuts could be achieved by “voluntary means”.
Unite, Britain’s biggest trade union, said it was engaging with Ford in an effort to safeguard jobs.
The cost-cutting plan has not been adjusted to account for the possibility of a “hard” exit by Britain from the European Union without securing tariff-free cross-border trade.
“If Brexit went in the wrong direction we would have to have another look, to mitigate that,” Armstrong said.
A Ford spokesperson said the carmaker currently assumes that any Brexit deal would keep tariff-free trade between Britain and Europe.
Ford Europe has struggled to turn a profit, reporting a ß245m (R3.92bn) loss before interest and taxes in the third quarter. –