FRANKFURT: Ford said it will have to cut 12,000 jobs in Europe by the end of next year to try to return the business to profit, part of a wave of cost reductions in an auto industry facing stagnant demand and record-level investments to build low emission cars.
The challenge of investing in electric, hybrid and autonomous vehicles while having to overhaul combustion engines to meet new clean-air rules, has forced Europe’s carmakers to slash fixed costs and streamline their model portfolios.
Ford Europe has been losing money for years and pressure to restructure its operations increased after arch-rival General Motors raised profits by selling its European Opel and Vauxhall brands to France’s Peugeot SA.
Ford said it has ceased production at three plants in Russia, is closing plants in France and Wales, and has cut shifts at factories in Valencia, Spain and Saarlouis, Germany.
Following the sale of the Kechnec Transmission plant in Slovakia, to Magna, Ford’s manufacturing footprint will be reduced to 18 facilities by end-2020, from 24 at present.
“We have largely concluded consultations with social partners regarding restructuring actions,” Stuart Rowley, President of Ford Europe told Reuters.
Approximately, 12,000 jobs will be affected at Ford’s wholly owned facilities and consolidated joint ventures in Europe by the end of 2020, primarily through voluntary separation programmes.
Around 2,000 of those are salaried positions, which are included among the 7,000 salaried positions Ford is reducing globally, the carmaker said. The rest are workers on hourly contracts or agency workers. Ford Europe has 51,000 employees in Europe or 65,000 when joint ventures are included.
In January, Ford announced a sweeping business review, which included the prospect of plant closures and discontinuing loss-making vehicle lines to pursue a 6% operating margin in Europe.
Demand for cars in Europe is falling, European automobile manufacturers’ association ACEA said on Thursday, predicting that European passenger car registrations will shrink by 1% in 2019 to 15 million cars, revising its previous forecast of 1% growth.
