Ford Europe to slash thousands of jobs in turnaround plan

Cornelia Mascio
Gennaio 12, 2019

"We have been asking the company for two years to clarify the situation regarding jobs and it's not until today that we have had the devastating answer". The stock plunged 39 percent past year.

The overhaul marks another sign of pressure on traditional automakers as they grapple with fundamental technology changes, stiffening environmental regulations and trade tensions.

The company has been making cars in Europe since 1911. As with many other carmakers, Ford warned it wouldn't meet its targets for 2018, and Hackett abandoned a goal to reach an 8 percent profit margin by 2020.

"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.

Ford F.N and Jaguar Land Rover unveiled sweeping job cuts across Europe on Thursday as carmakers struggle with a slump in demand for diesel vehicles, tougher emissions rules and a global economic slowdown led by China.

Ford was among USA carmakers that fell short of expectations when the industry presented sales for a year ago, adding to concern that a slowdown may occur in 2019.

Ford declined to confirm the figures and said it was now consulting with unions.

He said the announcement was not directly linked to Brexit, but he added that Ford will have to undertake a further review if the United Kingdom leaves the European Union without a deal in March.

Ford's debt has been trading like it's speculative grade, and Moody's Investors Service cut the carmaker's credit rating to one step above junk in August.

Volkswagen AG, which is in talks with Ford about a deeper alliance, said Thursday its namesake brand will redouble its focus on returns amid another year of "enormous challenges", foreshadowing more belt-tightening. The review also includes "rescaling the footprint of the business" with Ford reviewing the efficiency of its plants, Armstrong said.

In addition to the job layoffs, Ford will end production on some of its unprofitable vehicle models as well as close a plant in France. Similar to America, Ford will swing to a lineup of crossovers and SUVs, and drop several derivatives to streamline its offering, Armstrong said. Within the first nine months of 2018, Ford reported a loss of $199 million in Europe versus its $278 million profit in 2017 over the same time period.

Ford is undertaking a strategic review of Ford Sollers, its joint venture in Russian Federation.

The US carmaker is to abandon the multivan market - vehicles with more than five seats - stop manufacturing automatic transmissions in Bordeaux from August, review its operations in Russian Federation and combine the headquarters of Ford UK and Ford Credit to a site in Dunton, Essex.

"We will migrate out of the MPV segment", Armstrong said, referring to the family vans segment.

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