Back in January, Ford provided the preliminary details for its European restructuring plan. The company had been losing money there for years and didn’t want it to be remain a liability as it dumped cash into autonomous research and electric vehicle development. With aims to achieve a 6-percent operating margin within the region, the automaker’s plan to tidy up the business was put into motion.
Thus far, Ford has ceased production at three plants in Russia, cut shifts in Germany and Span (rest in peace, C-Max), and has earmarked additional facilities in France and the United Kingdom for closure. By the end of next year, the automaker expects to have cut 12,000 jobs related to its European operations.
That figure comes via Reuters, which discussed the restructuring plan with Ford’s European head Stuart Rowley. “We have largely concluded consultations with social partners regarding restructuring actions,” he said.
From Reuters:
About 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 programs.
Around 2,000 of those are fixed 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 currently has 51,000 employees in Europe (65,000 when you count joint ventures) and 24 facilities. But it’ll be shy 12,000 people and drop at least 6 factories by the time the ball drops on December 31st, 2020.
Based on statistics from the European Automobile Manufacturers’ Association (ACEA), Euro car sales fell by 4.6 percent in January vs the same month in 2018. At the time, ACEA claimed this was not the dire situation it seemed to and expected a stable year. But its tune has changed. On Thursday, the group suggested that European passenger car registrations would slip by 1 percent in 2019, nullifying its previous prophecy of modest growth.
The extended forecast for Europe looks equally grim. Most analysts now assume the region will continue to backslide in terms of growth, with the more optimistic scenario being stabilization. However, even a stagnating auto market is predicated on the belief that Europe’s economy will balance itself out when there’s a fair bit of evidence pointing toward a continental recession and continued trade woes. Still, let’s not count any chickens before they’ve hatched.
While the next few years are expected to be difficult for every manufacturer operating within Europe, Ford believes its plan to streamline its commercial vehicle business with help from Volkswagen and the restructured Ford Sollers joint venture will work. It’s also abandoning passenger “vans” (M-segment vehicles) to focus more on developing electrified crossovers — which it expects to be more profitable in the long run. Understandable, as Europe’s M-segment has been faltering for years and crossovers are more fashionable.
However, all of this means less product being built within Europe’s borders. As a result, Ford said it expects to triple passenger car imports into the market by 2024.
[Image: Ford Motor Co.]
A good idea on Ford’s part. The post-WW2 era is long gone, where only US industry wasn’t smashed, and products and expertise could be transplanted profitably across the globe.
And better over there, than over here.
They say there’s a great Social Safety net over there. They’ll be fine.
Also, possibly save Britain, these workers can just move anywhere in the EU and get a job. Eezy-peezy.
Agree.
Now that BREXIT appears to be likely in Oct, that is exactly what may happen, migrant Ford workers in search of jobs within the EU.
Good on Ford. React to the markets and reward the shareholders.
“React to the markets and reward shareholders”? Not at all.
Ford’s market share in Europe has fallen in each of the last 6 years. That is failure, and has cost Ford shareholders dearly. Ford isn’t shrinking its European presence because it wants to, but because it has to.
Another company listening to the siren song of downsizing as a path to greatness.
Leaving my sarcasm to the side, they have to cut the short term losses and regroup. Whether this makes sense as a long term strategy, is an answer which I don’t know.
they need to stop buying dilapidated train stations, investments in autonomy, trim it to the bone.
They will be able to buy autonomy off the shelf in a few years, that pimping of the stock is over in the market.
Amen, my last employer downsized themselves out of existence. The real question is; if Ford can’t figure out how to make a profitable car what makes them think they’ll be able to make a profitable autonomous car?
They won’t make profitable autonomous cars or any cars…it will be profitable autonomous SUVs and Crossovers and insanely profitable pickups.
How will this affect production of their future mobility solutions?
+1
VW always competed with Ford and GM (Vauxhall/Opel) in Europe from the 1950s on.
But when Mercedes and then BMW started pumping out cheaper cars, the writing was on the wall for the two US-owned companies. People as consumers still wander around in a daze of badge worship.
Nowadays, with all those A Class and BMW Series 1 and 2, Ford has to make a Focus/Kuga Escape equally as good in quality and appointments as the Germans or they won’t sell many cars. The Catch 22 is they have to sell for less because Fords are “cheap” cars in the public’s mind. What profit?
Caught between a rock and a hard place due to customer snootiness, no wonder Ford is in a state of semi-abandoning ship. GM already gave up. So has Honda whose prices were never low, but whose interiors just don’t make it Europeans eyes for the money. Their UK factory is closing because they just didn’t appeal locally, and they were forced to make Civic R and Civic hatchbacks for the US and Canada there just to fill up factory capacity, but still not to full level. Toyota and Nissan meander on, and the French and Fiat – how long will they really last limping along? All they have is chauvinism on their side. The other countries in the EU resent German domination in manufacturing but buy their products anyway.
All the other reasons anyone dreams up for Ford downsizing in Europe to concentrate on trucks and for GM leaving completely are just WAGs. The Germans won the PR war, simple as that.
Honda just gets beaten at their game in the Euro market by Mazda.
I don’t get it. Europeans are so much better educated, smarter and holier than us (just ask BAFO) and how that they like SUVs? They should love and worship zero emission/low kW electric golf carts en masse to save the world from climate change.
Regarding downsizing – they (GM, Ford, Chrysler) are clearing space for upcoming deluge of Chinese cars. Because China will be #1 almost in everything – thank our presidents.
Presidents don’t really have that much power; thanks to Congress who do the bidding of those who have deep pockets.
And the corporation that spear-headed the move of manufacturing to China was Walmart.
Thanks to our short-sightedness and greed, we helpd China become a superpower and a threat many decades earlier.
The idea was that if we make them rich and wealthy they will love and adore us and will be our best friend, just ask Japan (which single handedly destroyed US auto industry). And now it turns out that that they want moar, much moar and please hand over Moon too.
That was what the politicians and corporations used to sell the American public on the idea.
But just made the CEOs and other top brass immensely wealthier.
While Walmart sold $10-15 shirts (made their $$ on volume), the more upmarket designer brands didn’t cut prices (or even stop hiking prices) as production costs went WAY down.
Note that all these companies went to China and not Mexico (despite the existence of NAFTA) as production in Mexico was more expensive at the time.
A Ralph Lauren Polo is nearly $100 today; a few decades ago, it was under $50.
Even stuff w/ the “Made in Italy” label are either made by migrant Chinese labor in Italy or only have the final assembly done there.
Same with “Made in USA” staff. Most likely made by Mexican migrants. As well as locally made oil change.
Before long GM will be a wholly owned Chinese company with Barra and the GM board taking their golden parachutes.
Laid off Ford Proud