Ford to close plants in Europe

The Weekend Australian - - THE WALL STREET JOURNAL - WIL­LIAM BOS­TON

Ford is launch­ing an over­haul of its money-los­ing Euro­pean busi­ness that is ex­pected to in­clude thou­sands of job cuts, plant clo­sures and the can­cel­la­tion of low-profit mod­els amid a run of bad news for global car­mak­ers.

The move is part of a broad cost-cut­ting ef­fort that Ford chief ex­ec­u­tive Jim Hack­ett has em­barked on in an in­dus­try fac­ing the chal­lenges of elec­tric ve­hi­cles and a push to­wards au­tonomous driv­ing.

In Oc­to­ber, Ford in­formed em­ploy­ees of a global re­or­gan­i­sa­tion that could af­fect salaried jobs, part of Mr Hack­ett’s push to im­prove prof­its and boost its sag­ging stock price.

Steven Arm­strong, the com­pany’s pres­i­dent of Europe, Mid­dle East and Africa, de­clined to pro­vide de­tails on the planned job cuts dur­ing a call with re­porters on Thurs­day. He said they would be made across the board through­out Europe and were still be­ing ne­go­ti­ated with trade unions, as lo­cal labour laws often man­date.

How­ever, he said the belt­tight­en­ing would “have a sub­stan­tial im­pact”, with de­tails ex­pected to be avail­able by the end of June. “It will be a sig­nif­i­cant num­ber within the 50,000 we em­ploy,” he said.

The re­struc­tur­ing is the lat­est sign that wan­ing de­mand and weaker prof­its in Europe — amid con­cerns around Brexit, trade ten­sions, the grad­ual death of diesel en­gines and an eco­nomic slow­down in China — are forc­ing car man­u­fac­tur­ers to ag­gres­sively prune their busi­nesses af­ter years of steady growth.

From Jan­uary to Novem­ber, the most re­cent data avail­able, Ford sold 910,391 ve­hi­cles in the Euro­pean Union, down 2.3 per cent from the same pe­riod of 2017. That left the com­pany with a 6.4 per cent share of the Euro­pean mar­ket.

In Novem­ber, new-car sales in the EU fell 8 per cent from a year ear­lier, fol­low­ing a 7.3 per cent de­cline in Oc­to­ber and a 23.5 per cent plunge in Sep­tem­ber.

In a sep­a­rate an­nounce­ment, Jaguar Land Rover said it would cut 4500 jobs world­wide. JLR has been strug­gling with weaker de­mand in China and a dra­matic de­cline in diesel ve­hi­cle sales in Europe.

Ford said it would stick it out in Europe, at least for now.

“We de­cided the best op­tion is to stay in Europe as long as we can re­set the busi­ness and make it prof­itable,” Mr Arm­strong said.

The move in Europe is among the first el­e­ments of a broad, re­vamp­ing of Ford’s global op­er­a­tions. Last year, it said it would take up to five years to ex­e­cute an $US11 bil­lion ($15.3bn) re­struc­tur­ing, but has of­fered few de­tails about what parts might be sold or scrapped, lead­ing to some frus­tra­tion among in­vestors.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.