Ford Will Close Six European Plants as Part of Global Downsizing
DETROIT—Ford Motor Co. recently announced that it will eliminate about 20 percent of its workforce across Europe and close six factories in a sweeping overhaul aimed at reviving the money-losing region as the company also moves to prepare for the future of electric and self-driving cars.
The restructuring, which has been announced piecemeal, will involve reducing its manufacturing footprint in Europe to 18 facilities by the end of 2020 from 24 at the beginning of this year. Germany, the U.K. and Russia will be hardest hit by the cuts, which total about 12,000 regular staff as well as workers employed at joint ventures.
The cutbacks are a key part of Chief Executive Officer Jim Hackett’s $11 billion restructuring, which also includes 7,000 salaried job cuts worldwide. Hackett is trying to boost Ford’s bottom line by exiting the slow-selling sedan market in the U.S. to focus on high-profit sport-utility vehicles and trucks. In Europe, where Ford is the top selling brand in the U.K., the automaker also is backing away from the traditional passenger-car business to focus on commercial vans and trucks.
Ford is cutting costs as it pours billions into electric and self-driving cars. The company is also close to sealing a deal with Volkswagen AG to join forces to develop these vehicles.
Back in January, Ford announced a major revamp for Europe but didn’t specify at the time the full extent of the job cuts. As part of the changes, six plants will be closed or sold by the end of next year, including the Bridgend engine factory in South Wales, a transmission plant in France and an assembly site in Russia.
Ford said its European operations are “on track” for significant improvement this year. Over the long term, the company is pushing to lift the division’s profit margin to 6 percent from 0.7 percent in the first quarter. Ford lost $398 million in Europe last year, before interest and taxes.
The company also said that all its European model lines will include an electrified option, and a future family of battery-powered vehicles will be assembled in Europe. The carmaker will add at least three new nameplates to its lineup in the next five years and may pare more slow-selling or gas-guzzling variants.