Ford, Jaguar Land Rover to cut thou­sands of jobs in Europe

The Sun Herald - - Business - BY DAVID MCHUGH AND DANICA KIRKA

The head­winds buf­fet­ing the global auto in­dus­try were felt in Europe on Thursday as mass-mar­ket car­maker Ford and lux­u­ry­fo­cused Jaguar Land Rover an­nounced sweep­ing re­struc­tur­ings that will cost thou­sands of jobs.

Ford Mo­tor Co. said it will drop an un­spec­i­fied num­ber of jobs in Europe as it seeks to make its busi­ness there more con­sis­tently prof­itable. Ford is re­fo­cus­ing on com­mer­cial trucks and SUVs and dump­ing less lu­cra­tive mod­els while shift­ing pro­duc­tion to elec­tric cars over the longer term.

The Dear­born, Mich.based com­pany said re­duc­tions would be achieved as far as pos­si­ble through vol­un­tary de­par­tures ne­go­ti­ated with unions and em­ployee rep­re­sen­ta­tives. Ford of Europe, based in Cologne, Ger­many, has 53,000 peo­ple work­ing for it di­rectly and 68,000 when joint ven­tures such as those in Rus­sia and Turkey are in­cluded.

The com­pany’s new plans fol­low moves to close an au­to­matic trans­mis­sion plant in Bordeaux, com­bine ad­min­is­tra­tive head­quar­ters in Britain, and end pro­duc­tion of its C-Max mod­els in Saar­louis, Ger­many.

“In the last cou­ple of decades, Ford of Europe has never re­ally been sus­tain­ably prof­itable,” Steven Arm­strong, com­pany vice pres­i­dent and head of its op­er­a­tions in Europe, Mid­dle East and Africa, said in a con­fer­ence call with re­porters.

Global au­tomak­ers face mul­ti­ple chal­lenges.

They must ad­just to sweep­ing change ex­pected from a move to­ward battery-pow­ered and au­ton­o­mous ve­hi­cles, and to­ward pro­vid­ing trans­porta­tion as a ser­vice through ride­hail­ing and car-shar­ing smart­phone apps.

Car­mak­ers are also fac­ing a shift in con­sumer pref­er­ence away from sedans and hatch­backs to sport-util­ity ve­hi­cles.

Mean­while govern­ment reg­u­la­tion in the Euro­pean Union and China are push­ing them to de­velop more elec­tric cars.

On top of that, con­sumer and busi­ness con­fi­dence have been hit by wor­ries about Britain’s pos­si­ble de­par­ture from the Euro­pean Union with­out a ne­go­ti­ated trade deal, and by the U.S.China trade dis­putes.

One key head­wind – slow­ing auto sales in China – was the big is­sue for Jaguar Land Rover. The com­pany says it will cut 4,500 jobs as it deals with the China down­turn and grow­ing un­cer­tainty about the terms of Brexit. The lux­ury car­maker, owned by In­dia’s Tata, says the cuts will be in ad­di­tion to the 1,500 peo­ple who left the busi­ness in 2018. The com­pany em­ploys about 44,000 peo­ple in the U.K.

Chris­tian Stadler, pro­fes­sor of strate­gic man­age­ment at War­wick Busi­ness School, said Jaguar was fac­ing a “per­fect storm of chal­lenges,” with the drop in Chi­nese sales be­ing the most im­me­di­ate prob­lem.

The cuts will not just be bad news for the Jaguar staff, Stadler said. Thou­sands more work­ers in the U.K. are part of the Jaguar sup­ply chain – jobs that will now also be at risk.

The Europe an­nounce­ments fol­low Gen­eral Mo­tors’ dis­clo­sure in Novem­ber that it would lay off 14,000 fac­tory and white-col­lar work­ers in North Amer­ica and put five plants up for pos­si­ble clo­sure as it re­struc­tures to cut costs and fo­cus more on au­ton­o­mous and elec­tric tech­nol­ogy.

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