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Ford Plans to Cut Thousands of Jobs Across Europe Ford Plans to Cut Thousands of Jobs Across Europe
(about 5 hours later)
LONDON — Ford Motor Company plans to cut thousands of jobs across Europe in a bid to reduce costs and improve profitability, the company said on Thursday. LONDON — Ford said Thursday that it would cut thousands of jobs across Europe as it struggles to reduce costs amid a drop in profits caused by tougher emissions rules and a declining demand for cars.
The company, which has 68,000 employees in Europe, including through joint ventures, did not specify exactly how many jobs would be lost, but a press officer confirmed that it would be “thousands.” The company said it would consult with unions and would aim to cut jobs through voluntary measures as much as possible. The reductions will affect employees across all departments, the company said. The company, which has 68,000 workers in Europe, including through joint ventures, did not specify how many jobs it would shed, but a spokesman said the number would be in the “thousands.” Ford said it planned to consult with labor unions about the cuts, which will affect all departments, and hoped that as many as possible would be voluntary.
“We are taking decisive action to transform the Ford business in Europe,” Steven Armstrong, the group vice president and president for Europe, Middle East and Africa, said in a statement. “We will invest in the vehicles, services, segments and markets that best support a long-term sustainably profitable business, creating value for all our stakeholders and delivering emotive vehicles to our customers.” The carmaker also said a factory in Bordeaux, France, that makes small automatic transmissions would be closed at the end of August. Ford is also exploring the possibility of discontinuing production of two minivan models at its factory in Saarlouis, Germany, as the European market for such vehicles shrinks; reviewing a joint venture in Russia, Ford Sollers; and planning to consolidate its headquarters in Britain.
Ford also said it would close a factory in Bordeaux, France, where it makes small automatic transmissions at the end of August. It is also discussing an end production of two minivan models at its factory in Saarlouis, Germany, as the market for minivans shrinks in Europe; reviewing a joint venture in Russia, Ford Sollers; and planning to consolidate its headquarters in Britain. The auto industry is showing signs of strain globally. Car sales in the United States appear to have peaked, as incentives like low-interest loans come to an end. Officials in China said this week that car sales there plummeted 19 percent in December, the steepest decline in modern record-keeping that coincides with a broader slowdown of the Chinese economy. In Europe, automakers are grappling with various challenges, including Britain’s looming exit from the European Union, which could result in higher tariffs on cars and car parts.
“Working collectively with all stakeholders, our new strategy will enable us to deliver a more focused line up of European-built passenger vehicles, while growing our import and commercial vehicle businesses — for a healthier and more profitable business,” Mr. Armstrong said. Also on Thursday, British carmaker Jaguar Land Rover said it would reduce its global work force by 4,500 people, citing “multiple geopolitical and regulatory disruptions.” The cuts, which the company said would come through a voluntary redundancy program, follow the departure of 1,500 workers last year.
Ford started downsizing in Europe in 2013 as a glut of cars meant its losses kept piling up, but its efforts to retrench in the region have been costly because of severance payments. From January to November 2018, it made up about 6.4 percent of new cars in the region, compared with roughly 24 percent for the VW Group and 16 percent for Groupe PSA, according to the European Automobile Manufacturers Association. Carmakers are confronting a tightening of emissions standards in Europe that have sharply reduced the average allowed level of carbon emissions for cars and trucks. Ford said Thursday that it would be offering electric versions of its new passenger vehicles. The company has also been testing hybrid vans in London and Valencia.
Separately, the British carmaker Jaguar Land Rover is reducing its global work force by 4,500. [Read more about Ford’s efforts to cut costs and find new partners.]
Although record sales of pickup trucks and sport utility vehicles in the United States have helped Ford’s profit, the company has been losing money overseas. It has held talks with Volkswagen about a possible alliance in Europe and South America, and explored cooperation with Mahindra, an automaker in India, where it has also struggled. Ford, which has 6.4 percent of Europe’s new car market, has struggled to turn a profit in the region. It began to shrink its European operations in 2013 as its losses piled up amid a glut of cars, but the retrenchment efforts have been costly because of severance payments.
Although record sales of pickup trucks and sport utility vehicles in the United States have improved the company’s profits, it has been losing money overseas. Ford has held talks with Volkswagen about a possible alliance in Europe and South America, and has explored cooperation with Mahindra, an automaker in India, a country where it has also struggled.
Ford said last year that it would reorganize its worldwide salaried work force with the goal of making it leaner by this year’s second quarter.
“We are taking decisive action to transform the Ford business in Europe,” Steven Armstrong, the group vice president and president for Europe, Middle East and Africa, said in a statement Thursday. “We will invest in the vehicles, services, segments and markets that best support a long-term sustainably profitable business, creating value for all our stakeholders and delivering emotive vehicles to our customers.”
Ford is not the only American carmaker to pull back from in Europe. General Motors sold its Opel and Vauxhall brands to PSA Group of France in 2017 in hopes of improving its profit margins after persistent losses in the region.