Published: Sat, January 12, 2019
Finance | By Loren Pratt

Ford to cut jobs to strengthen European business

Ford to cut jobs to strengthen European business

According to the firm, it is "accelerating key fitness actions and reducing structural costs".

"We will take effective measures to the European business of Ford to set up new", said Europa chief Steven Armstrong.

"We believe Ford Europe could require as much as a 20 to 30% reduction of capacity and headcount", Morgan Stanley analyst Adam Jonas said in a note on Thursday.

The Financial Services segment consists of Ford Credit, which offers automotive financing products to and through automotive dealers.

Meanwhile, Ford signalled "significant" cuts among its 50,000-strong European workforce under plans to make it more competitive and make its business more sustainable.

Ford is establishing three customer-focused business groups in Europe - Commercial Vehicles, Passenger Vehicles, and Imports - each with clearly defined aspirations and dedicated organizations.

"We are looking to make a step-change in the performance of the business".

Over the long term, Ford is targeting earnings before interest and taxes of 6 percent of sales in Europe.

Beyond this, the company says it will continue to reduce the complexity of its offerings, and prioritise profitable vehicles and models.

Ford officials had called the commercial vehicle program a "quick win" and discussed how a broader tie-up would allow the No. 2 USA automaker to reduce the number of different vehicles it builds and shrink manufacturing, engineering and purchasing costs.

Ford said then it would invest $4 billion through 2023 in its newly formed Ford Autonomous Vehicles LLC, including the $1 billion it previously had earmarked for Argo AI, the Pittsburgh-based self-driving startup it acquired in 2017. The carmaker announced a year ago that it would significantly increase its planned investments in electric vehicles to $11bn by 2022 and have 40 hybrid and fully electric vehicles in its model line-up by this date.

At the timer, the brand referred to the reports as "speculation".

Ford intends to end production of small automatic transmissions in Bordeaux, France as well as production of Grand C-Max and C-Max in Germany, Saarlouis due to declining demand for compact multi-purpose vehicles in Europe.

Ford (F) said it would end production of some unprofitable models and shift its strategy in hard regional markets including Russian Federation. A decision is expected in the second quarter.

Ford's $14 billion global cost-saving plans includes exiting the minivan segment, stopping manufacturing of automatic transmissions in Bordeaux in August, reconsidering its operations in Russian Federation, and combining the headquarters of Ford U.K. and Ford Credit to a site in Dunton, Essex.

Ford will provide specific details of its strategy in the coming months, once appropriate formal consultation with its Works Council and trade union partners has concluded.

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