Ford Motor Co (NYSE: F)
Car maker Ford on Thursday said it will cut thousands of jobs across Europe, discontinue loss-making vehicle lines, and end operations in unprofitable markets as part of a broader cost-cutting strategy initiated by Ford CEO Jim Hackett.
Steven Armstrong, Ford’s President of Europe, Middle East and Africa said, “We are taking decisive action to transform the Ford business in Europe. There’ll be significant impact across the region. This isn’t a one or two-year issue. We have had periods of profitability but not on the level it should be.”
The automaker currently has about 53,000 people working at its wholly-owned facilities across Europe primarily in the United Kingdom, Spain, and German. He did not specify how many are people are going to lose jobs, but said Ford hopes to achieve that through voluntary redundancies.
Ford is also planning to review its operations in Russia as part of a “step-change in the performance of the business” according to Armstrong. The company said it will launch a strategic review of its Ford Sollers venture that is based in Russia, with a number of restructuring options available.
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.
The auto maker, which has been present in Europe since 1911, also plans to consolidate its United Kingdom headquarters. Ford has struggled to make profits in Europe, particularly after the UK voted to leave the European Union. Foreign exchange rates, a softening car market, and a fall in diesel vehicle sales have also taken a toll on its earnings in the region.
Executives of the company have warned that its Dagenham and Bridgend sites risk facing significantly more dramatic job cuts than currently anticipated, if the UK exits with EU without a trade deal.
Ford also said that in future, it would avail a hybrid or electric version of every model it offers in Europe, as global car makers ramp up production of electric vehicles. Shares of the company ran up 0.9% to $8.80 before the opening bell, but were down 2.52% in the first 15 minutes of regular trade.
Ford Motor Co. Profile
Ford Motor Co. engages in the manufacture, distribution, and sale of automobiles. It operates through the following segments: Automotive and Financial Services. The Automotive segment engages in designing, manufacturing, marketing and servicing of Ford cars, trucks, SUVs, and electrified vehicles, as well as Lincoln luxury vehicles.
The Financial Services segment consists of Ford Credit, which offers automotive financing products to and through automotive dealers. The company was founded by Henry Ford on June 16, 1903 and is headquartered in Dearborn, MI. – CNN Money