Ford calls Europe re­struc­ture

Viet Nam News - - WORLD BUSI­NESS -

NEW YORK — Strug­gling with a sag­ging stock price and slug­gish sales, US car gi­ant Ford took steps to re­gain its foot­ing this week with the an­nounce­ment of a mas­sive re­struc­tur­ing ef­fort in Europe – even as it pre­pared for an im­mi­nent strate­gic part­ner­ship with Ger­man car­maker Volk­swa­gen.

The iconic Amer­i­can brand will roll out a ma­jor re­or­gan­i­sa­tion of its Euro­pean op­er­a­tions to boost profitabil­ity, in­clud­ing thou­sands of po­ten­tial job cuts.

It was also poised to an­nounce a ma­jor al­liance with VW next week, as itraces to catch up in au­tonomous and elec­tric car tech­nolo­gies.

Ford, which em­ploys 200,000 peo­ple world­wide and brought in nearly US$ 146 bil­lion in rev­enue in 2017, has pre­vi­ously said it wants to cut costs by about $ 25.5 bil­lion by 2022.

Ac­cord­ing to an­a­lysts, 24,000 jobs are un­der threat.

Ford al­ready stopped pro­duc­ing sedans and small cars to save $ 11 bil­lion inthe US – and it might also scrap the Fi­esta, Fo­cus and Mon­deo mod­els in Europe, where they are pop­u­lar.

Ad­di­tional cost cut­ting could in­clude the shut­ter­ing of un­der­used US­fac­to­ries, ac­cord­ing to Mor­gan Stan­ley an­a­lyst Adam Jonas, de­spite Pres­i­dent Don­ald Trump’s pub­lic pres­sure

The iconic Amer­i­can brand will roll out a ma­jor re­or­gan­i­sa­tion of its Euro­pean op­er­a­tions to boost profitabil­ity, in­clud­ing thou­sands of po­ten­tial job cuts.

on auto mak­ers to main­tain their US work­forces.

It could also hit China and Latin Amer­ica, two mar­kets where Ford is strug­gling, a source fa­mil­iar with the plans said.

In to­tal, the cuts could save Ford $ 14 bil­lion in its in­ter­na­tional op­er­a­tions.

“This is not about mak­ing the busi­ness to­day more ef­fi­cient, but com­pletely re­design­ing it,” said Steve Arm­strong, Ford’s chief of Europe, Mid­dle East and Africa op­er­a­tions.

Diesel out

Ford’s trans­for­ma­tion push comes at a time when the au­to­mo­tive sec­tor is un­der­go­ing ma­jor changes as a re­sult of the de­vel­op­ment of new tech­nolo­gies – ac­cel­er­ated by dis­en­chant­ment over diesel en­gines.

Au­tonomous and elec­tric ve­hi­cles have been ex­pen­sive to de­velop, and re­quire ei­ther new fac­to­ries or a com­plete mod­ern­iza­tion of ex­ist­ing ones.

Ford has been fac­ing the same head­winds as the rest of the low- profit mar­gin in­dus­try: trade ten­sions, a po­ten­tial global eco­nomic slow­down, a slow­ing Chi­nese econ­omy, Brexit in Europe, and cur­rency fluc­tu­a­tions.

The rapid growth of car shar­ing ser­vices such as Uber and Lyft also sug­gests that au­to­mo­bile groups will have to re­duce their pro­duc­tion in the fu­ture.

Mean­while, ne­go­ti­a­tions have been on­go­ing for months over a Ford- VW­part­ner­ship to de­velop au­tonomous tech­nolo­gies, as well as com­mer­cial and elec­tric ve­hi­cles.

The al­liance is ex­pected to be an­nounced next week at the De­troit auto show on Tues­day, a source fa­mil­iar with the mat­ter said.

“Volk­swa­gen to­day is a good match. We have dif­fer­ent geo­graph­i­cal pro­files.

We both have to im­prove our busi­ness re­sults,” Jim Far­ley, Ford’s head of global mar­kets, said on Wed­nes­day. — AFP

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