Ford to Slash Jobs in Europe
Ford is cutting thousands of jobs, ending production of some models and closing a plant in Europe ahead of a possible alliance with market leader Volkswagen. The US carmaker announced the changes on Thursday, framing the restructuring as part of a global overhaul that the company has said will cost $11 billion. Ford said it would end production of some unprofitable models and shift its strategy in difficult regional markets including Russia.
The carmaker said it would proceed with plans to close a transmissions plant in France, and it has started negotiations with unions about halting production of the C-Max compact car at a factory in Germany. “We are taking decisive action to transform the Ford business in Europe,” Steven Armstrong, Ford’s president for Europe, Middle East and Africa, said in a statement.
The carmaker said in July that it would spend $11 billion over the next three to five years to reshape its business around the world. Ford’s sales and profitability are strong in the United States, but the company is trailing competitors badly in China and continuing to struggle in Europe and Latin America.
In the first nine months of 2018, Ford reported European losses of $199 million, compared to a profit of $278 million in the same period of 2017. It has projected a loss for the region for 2018. Analysts have speculated that Ford and Volkswagen, the world’s largest automaker and a dominant force in Europe, could team up as they seek to develop autonomous cars and other technology.
Tim Urquhart, a principal automotive analyst at IHS Markit, says Ford has experienced “a very difficult market environment” in Europe, facing pressure from premium carmakers and more affordable brands. Luxury brands like Audi, BMW and Mercedes-Benz are offering smaller vehicles that appeal to a wider range of consumers, he says, while budget options like Hyundai and Kia are growing in popularity among price-conscious Europeans. “I call companies like Ford … the squeezed middle,” Urquhart says. “They’re being squeezed from both angles.”