Ford to close plants in Europe
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.